Semtech breaks profit record, buys French wireless firm
Chipmaker Semtech beat analysts expectations by two cents a share and set a profit record while continuing its streak of acquisitions on March 7.
Semtech broke its year-end records with profits up 23 percent to $89 million on net sales of $480 million, a 5 percent increase that was also a new high for the Camarillo firm.
The numbers translate to earnings per share of $1.78, two cents ahead of the $1.76 average of seven analysts polled by Thomson/First Call.
Semtech reports on an offset fiscal year schedule, so the results form its fiscal 2012 performance. As expected, fourth-quarter sales dropped 10.5 percent on what President and CEO Mohan Maheswaran called “seasonal trends, overall market softness, and the impact of flooding in Thailand,” where Semtech makes many of its products, according to a news release.
Semtech also announced its purchase of a French smart meter company for $5 million in cash. Headquartered in Grenoble, France, privately-held Cycleo designs gear for wireless long-range semiconductor products used in smart metering and other industrial and consumer markets, Semtech said in a release.
Currently, Semtech makes a line of higher-sensitivity, lower-power wireless communication products. Maheswaran said in a release that the addition of the French firm propels Semtech into the energy control, security and asset management markets. “Cycleo’s IP portfolio is highly complementary to Semtech’s product roadmap,” he said.
Cycleo’s stockholders could earn up to $16 million more if the firm hits financial targets. Semtech stock rose 2 percent to $28.14 on March 7. Semtech announced the news after the markets closed.
The Cycleo deal follows Semtech’s $494 million purchase of Canadian firm Gennum Corp. earlier this year and its 2010 acquisition of Sierra Monolithics for $180 million in cash.
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