DOW JONES NEWSWIRES
Atmel Corp.'s (ATML) first-quarter profit dropped by a
less-than-expected 38% as the chip maker's sales appeared to bottom
out, prompting an upbeat tone from its chief executive.
The company also added $200 million to its stock-buyback program
on top of its existing $500 million authorization, of which the
company exercised about $489.4 million worth of common stock.
Atmel's reported earnings have deteriorated over the past three
quarters as many of its customers work through inventory built up
during a broader slump in the semiconductor industry last year. The
company warned in February its top line would again slip amid
weaker demand for memory chips as well as application-specific
integrated circuits, which are used in the defense and avionics
industries.
Many chip makers, including Atmel, have said the sector reached
its trough earlier this year, citing the volume of new orders.
Atmel is particularly well-positioned to benefit from growing
demand for the hardware underpinning touchscreens. Demand for the
screens is surging after Apple Inc. (AAPL) popularized them with
its iPhones and iPads.
"As we predicted, our business bottomed during the first
quarter, and we are well positioned to capitalize on the improving
industry environment," President and Chief Executive Steve Laub
said.
The latest results also benefited from the release of reserves
related to a previously established foreign-government grant.
Atmel reported a profit of $20.4 million, or 5 cents a share,
down from $74.5 million, or 16 cents a share, a year earlier.
Excluding stock-based compensation costs, earlier restructuring
charges and other adjustments, per-share earnings dropped to 8
cents from 26 cents. Analysts polled by Thomson Reuters were
looking for a 4-cent profit.
Revenue fell 22% to $357.8 million, in line with the company's
downbeat February forecast of $341.4 million to $360.6 million.
Gross margin narrowed to 42.6% from 51%.
Shares were up a penny at $9 in after-hours trading. The stock
has climbed 11% so far this year.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909;
andrew.fitzGerald@dowjones.com