Semiconductor manufacturer Atmel (NASDAQ:ATML) reported a smaller GAAP loss of $0.07 for Q3 after the bell last night, and the stock climbed over 7% after-hours. The reason? Investors looked beyond EPS to applaud 5% sequential and 7% year-over-year revenue gains, strong operational and free cash flow, and more debt paydown. Little things like that.

Investors lapped up conference-call remarks (which we got courtesy of a transcript from CCBN's StreetEvents, subscription required) like these from CEO George Perlegos, not known for hyperbole: "Visibility has been improving and pricing has stabilized and even improved in many markets," and "...we are very encouraged by another quarter of increased demand."

With steady gross margins, too. Can anyone say "recovery" yet?

The CFO could: "We've been very cautious about calling an upturn, but the numbers seem to indicate that one has begun." He then projected low double-digit revenue growth for 2004 with "several points" of gross-margin improvement. With flat capital expenditures, the company should continue its uninterrupted paydown of $541 million in long- and short-term debt, while fattening its $408 million in cash and equivalents.

All four of the company's business units had something good to say in an industry whose investors are dying for an upturn. ASIC group revenues from security, wireless baseband, SIM card, Wi-Fi, and USB controller chips, among others, grew 15%. Microcontrollers stayed flat, but Atmel shipped a higher number of study kits -- a leading indicator for sales of its flash-based products. Memory product sales climbed 5%. Though sales declined 4% in the fourth unit, RF and Automotive, expense cuts yielded higher profitability.

For a very active stock -- frequently in Nasdaq's 10 most active -- Atmel gets surprisingly little love. Except from our own Motley Fool Income Investor's Matthew Emmert, whose Speculating in Tech clearly explains the value proposition for this competitor of Texas Instruments (NYSE:TXN) and, in some arenas, Intel (NASDAQ:INTC) -- whose own good news Rick Munarriz reported on Tuesday.

Atmel was a penny stock until recently, but with a market cap of $2.5 billion, hardly a penny company. And that stock is up 147% on the year -- from $2.23 to yesterday's $5.05 close -- and 400% from its 52-week low of a measly dollar. Investors on our Atmel discussion board share the developments. Please join them!