Semtech 1Q Profit Falls 39 Percent As Sales Slump

CAMARILLO, Calif. (AP) — Semiconductor maker Semtech Corp. on Wednesday said its first-quarter profit fell 39 percent as cost-cutting efforts failed to fully offset lower sales. But results still topped Wall Street estimates and the company forecast better-than-expected sales for the second quarter.

For the three months ended April 26, Semtech said profit declined to $4.9 million, or 8 cents per share, from $8.1 million, or 13 cents per share, in the corresponding period last year. The results include various acquisition-related costs, stock-based compensation expenses and restructuring charges and thus aren't directly comparable to Wall Street estimates, which typically exclude such items.

Revenue dropped 19 percent to $60.1 million from $74.4 million a year ago, but still beat analysts' average estimate of $55.4 million, according to a Thomson Reuters poll.

Mohan Maheswaran, Semtech's president and chief executive, said that despite the difficult economic environment, the company was able to expand gross margins, lower inventory and increase its cash balance.

Operating costs fell 13 percent to $27.8 million. Semtech trimmed its selling, general and administrative costs to $17.3 million from $18.6 million, and its product development and engineering costs to $10.1 million from $11.1 million in the prior-year period.