What had already been a fairly dodgy year for semiconductor stocks has managed to get worse in the past three months or so. And though Intersil's
Fortunately, the financial performance continues to come along reasonably well for the analog-chip company. Revenue rose 35% on an annual comparison and 5% on a sequential basis, despite some softness in the computer segment (which makes up nearly one-fourth of sales) and some ripples in the consumer market.
Margins, though, require a bit more explanation. While gross margins improved annually and sequentially no matter how you slice them, operating margin was down a bit sequentially on a GAAP basis, but up slightly on a non-GAAP basis. Since I think stock compensation expense is "real" -- and a meaningful part of the difference -- I'd say that margins weakened just a bit.
The basic underlying story at Intersil really hasn't changed much. The company is aggressively moving into higher-end applications for its chips and seeing a boost in gross profits as a result. What's more, the company has been very active in new product introductions in the first half of 2006, and there's at least the possibility that better second-half demand for chips for LCD TVs and next-gen DVD players will help results.
It's also hard not to be impressed with the breadth of possible product and market opportunities. In handheld power alone, the company deals with names including Motorola
Of course, Linear Technology
For more chippy Foolishness:
- No Dip for Intersil's Chips
- Freescale Nails SanDisk?
- National Semiconductor: A Second Bite at the Cherry
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).