Earnings Highlights and Review: Semtech’s Adjusted Net Sales Jumped 14%

Research Desk Line-up: Analog Devices Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 21, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Semtech Corp. (NASDAQ: SMTC), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=SMTC, following the Company’s announcement of its first quarter fiscal 2018 financial results on May 31, 2017. The semiconductor specialist reported better than expected earnings results and provided guidance for the upcoming quarter. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Get more of our free earnings reports coverage from other constituents of the Semiconductor – Integrated Circuits industry. Pro-TD has currently selected Analog Devices, Inc. (NASDAQ: ADI) for due-diligence and potential coverage as the Company announced on May 31, 2017 its financial results for Q2 FY17 which ended on April 29, 2017. Register for a free membership today, and be among the early birds that get access to our report on Analog Devices when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on SMTC; also brushing on ADI. With the links below you can directly download the report of your stock of interest free of charge at:

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Earnings Reviewed

For its first quarter of fiscal year 2018, which ended April 30, 2017, Semtech’s GAAP net sales were $143.8 million up 10% on a y-o-y basis. The Company’s net sales were reduced by $5.3 million due to share-based compensation associated with the issuance of a Warrant to Comcast. Excluding the offset associated with the Warrant, Semtech’s net sales were $149.1 million, and 14% increase y-o-y and represented the sixth consecutive quarter of results above the midpoint of the Company’s guidance, but missed analysts’ estimates of $146.4 million.

For Q1 FY18, Semtech’s GAAP gross margin decreased 60 basis points sequentially to 59% as the benefit of a more favorable product mix was offset by the impact of the higher sequential Comcast’s warrant expense. The Company’s non-GAAP gross margin for the reported quarter was 60.9%, an increase of 40 basis points sequentially. Semtech’s Q1 GAAP operating margin increased 180 basis points sequentially, while non-GAAP operating margin improved 290 basis points compared to the previous quarter.

In Q1 FY18, Semtech’s shipments into Asia represented 75% of total net sales. The Company’s sales from North America totaled 18% and Europe was 7%. The total sales to distribution represented approximately 64%, and the direct net sales represented approximately 36%.

Semtech reported Q1 FY18 earnings of $11.82 million, or $0.18 per share, compared to earnings of $6.89 million, or $0.11 per share, in Q1 FY17. The Company’s earnings, adjusted for one-time gains and costs, came in at $0.44 per share, surpassing Wall Street’s expectations of $0.41 per share.

Cash Matters

In Q1 FY18, Semtech’s cash flow from operations was approximately $10 million. The Company’s cash and investments in the reported quarter were $281.55 million as of April 30, 2017, compared to $297.13 million as of January 29, 2017. Semtech’s long-term debt, excluding the current portion, was $222.91 million at the end of the reported quarter compared to $226.52 million at the end of the previous quarter. For Q1 FY18, approximately 76% of its cash and investments were domiciled in international accounts, and 24% was based in the US.

During Q1 FY18, Semtech repurchased approximately $10 million, or 300,000 shares, of stock, and the outstanding stock repurchase authorization stands at approximately $52 million. In Q1 FY18, the Company’s accounts receivable increased 9% sequentially due to higher net sales and the lower mix of shipments to distributors. Semtech’s days of sales outstanding decreased 3 days to 33 days. The Company’s net inventory in absolute dollar terms increased approximately 17% sequentially and represented 111 days of inventory.

Outlook

For Q2 FY18, Semtech is forecasting GAAP net sales to be in the range of $147.0 million to $157.0 million, while non-GAAP net sales are expected to be between $150.0 million to $160.0 million. The Company expects gross margin to be in the range of 59.5% to 60.6% and non-GAAP gross margin is expected to be in the band of 60.5% to 61.5%.

For the upcoming quarter, Semtech is estimating earnings per diluted share to be in the range of $0.20 to $0.26, while non-GAAP earnings per diluted share are projected to be in the range of $0.43 to $0.49

Stock Performance

On Tuesday, June 20, 2017, the stock closed the trading session at $35.70, falling 1.38% from its previous closing price of $36.20. A total volume of 566.20 thousand shares have exchanged hands, which was higher than the 3-month average volume of 483.58 thousand shares. Semtech’s stock price soared 6.73% in the last three months, 10.87% in the past six months, and 47.03% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have rallied 13.15%. The stock is trading at a PE ratio of 39.76. At Tuesday’s closing price, the stock’s net capitalization stands at $2.35 billion.

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