Shares of Synaptics (SYNA 0.77%) jumped on Friday despite a mixed third-quarter report and lackluster fourth-quarter guidance. With the stock down substantially over the past few years, a bottom-line beat may have been enough to offset the bad news. The stock was up about 10.9% at 3:30 p.m. EDT.
Synaptics reported third-quarter revenue of $334 million, down 15.2% year over year and about $11 million below the average analyst estimate. Mobile revenue was down 16%, to $204.7 million; IoT revenue was down 29%, to $63.1 million; and PC revenue was up 10%, to $66.2 million. Non-GAAP earnings per share came in at $0.83, down from $0.92 in the prior-year period but $0.12 higher than analysts were expecting.
"While Synaptics continues to be impacted by the residual effects of unfavorable supply chain dynamics in the near term, we are confident in the strengths and untapped potential of our product portfolio and are evaluating how best to leverage these assets with a focus on aligning the business toward achieving better long-term profitability," said Saleel Awsare, SVP and General Manager of the IoT division.
Synaptics expects its IoT platform to return to growth in the fiscal fourth quarter after struggling to grow the business in recent quarters.
Synaptics expects to produce fourth-quarter revenue between $300 million and $320 million, down 20.2% year over year at the midpoint. Analysts were expecting revenue guidance of $362.5 million.
While there was little to like about Synaptics' report other than a smaller-than-expected earnings decline, the stock was down nearly 70% from its multi-year high reached in 2015, prior to the report. With the stock so beaten down, a small piece of good news was apparently enough to drive shares higher.