Atmel's Bottom Line Shrinks

SAN FRANCISCO -- Atmel's(ATML Quote - Cramer on ATML - Stock Picks) bottom line declined more than 75% in the first quarter, but the chipmaker's results still bested Wall Street expectations.

The San Jose, Calif., chipmaker said sales in the three months ended March 31 totaled $411.2 million, up 5% year-over-year, and ahead of the average analyst expectation of $403.9 million.

Net income was $6.8 million, or 2 cents a share, vs. $28.9 million, or 6 cents a share at this time last year. Analysts polled by Thomson Financial were looking for EPS of one penny.

Atmel's first-quarter net income was weighed down by a $5.3 million decline in interest income.

Shares of Atmel were off 2 cents at $3.70 in extended trading Wednesday.

The company said microcontroller revenue increased 8% sequentially and 21% year-over-year. Earlier this week Microchip(MCHP Quote - Cramer on MCHP - Stock Picks), another maker of microcontroller chips posted better-than-expected revenue, while Silicon Labs(SLAB Quote - Cramer on SLAB - Stock Picks) reported a sequential decline in microcontroller revenue Wednesday.

Atmel CEO Steven Laub attributed the company's first-quarter sales growth to the strength of the company's products "and the benefits we are realizing from refocusing Atmel's business operations on areas that offer the best opportunity for profitable growth."

Looking ahead, the company said revenue in the current quarter will be flat to up 3% sequentially, which translates to a range of $411.2 million to $423.5 million. The average analyst expectation called for sales of $416.1 million.