The 10-second takeaway
For the quarter ended April 29 (Q1), Semtech met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue shrank and GAAP earnings per share dropped significantly.
Margins dropped across the board.
Semtech booked revenue of $116.6 million. The seven analysts polled by S&P Capital IQ anticipated revenue of $115.7 million on the same basis. GAAP reported sales were 4.7% lower than the prior-year quarter's $122.4 million.
EPS came in at $0.27. The six earnings estimates compiled by S&P Capital IQ averaged $0.31 per share. GAAP EPS of $0.03 for Q1 were 91% lower than the prior-year quarter's $0.34 per share.
For the quarter, gross margin was 47.4%, 1,300 basis points worse than the prior-year quarter. Operating margin was -16.4%, 3,810 basis points worse than the prior-year quarter. Net margin was 1.9%, 1,660 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $150.3 million. On the bottom line, the average EPS estimate is $0.42.
Next year's average estimate for revenue is $590.6 million. The average EPS estimate is $1.68.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 89 members out of 99 rating the stock outperform, and 10 members rating it underperform. Among 25 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 24 give Semtech a green thumbs-up, and one gives 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 $34.00.
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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.