The 10-second takeaway
For the quarter ended Jan. 29 (Q4), Semtech met expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share dropped significantly.
Margins contracted across the board.
Semtech logged revenue of $104.0 million. The seven analysts polled by S&P Capital IQ hoped for revenue of $105.2 million on the same basis. GAAP reported sales were 11% lower than the prior-year quarter's $116.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.32. The seven earnings estimates compiled by S&P Capital IQ predicted $0.30 per share on the same basis. GAAP EPS of $0.19 for Q4 were 51% lower than the prior-year quarter's $0.39 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 57.4%, 280 basis points worse than the prior-year quarter. Operating margin was 11.5%, 900 basis points worse than the prior-year quarter. Net margin was 11.9%, 1,050 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $111.7 million. On the bottom line, the average EPS estimate is $0.36.
Next year's average estimate for revenue is $507.7 million. The average EPS estimate is $1.76.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 91 members out of 101 rating the stock outperform, and 10 members rating it underperform. Among 31 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 29 give Semtech a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Semtech is outperform, with an average price target of $31.14.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.