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Why Peregrine Semiconductor (PSMI) Is Down Today

NEW YORK (TheStreet) -- Peregrine Semiconductor  (PSMI) was falling 16.84% to $5.53 on Tuesday afternoon after the manufacturing company announced fourth-quarter results that were below analysts' expectations.

The company reported a loss of 16 cents a share, which was 13 cents worse than the consensus estimate of a three-cent loss a share. Revenue totaled $43.3 million, which was less than the consensus estimate of $45.09 million.

Peregrine also forecast revenue guidance for the first quarter of the fiscal year 2014 in the range of $33 million to $36 million, which was less than the consensus estimate of $43.5 million.

"We reported fourth quarter revenue in line with our prior guidance," said President and CEO Jim Cable in the company's statement. "For 2014, we see a number of challenges facing the smartphone industry. However, we believe our product development and our progress in developing an integrated RF front-end positions us well for 2015 as the industry enters a strategic transition."

TheStreet Ratings team rates PEREGRINE SEMICONDUCTOR CORP as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate PEREGRINE SEMICONDUCTOR CORP (PSMI) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, unimpressive growth in net income and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Looking at the price performance of PSMI's shares over the past 12 months, there is not much good news to report: the stock is down 44.86%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Semiconductors & Semiconductor Equipment industry. The net income has decreased by 5.9% when compared to the same quarter one year ago, dropping from $4.71 million to $4.43 million.
  • PEREGRINE SEMICONDUCTOR CORP's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PEREGRINE SEMICONDUCTOR CORP turned its bottom line around by earning $0.20 versus -$0.31 in the prior year. For the next year, the market is expecting a contraction of 10.0% in earnings ($0.18 versus $0.20).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, PEREGRINE SEMICONDUCTOR CORP's return on equity is below that of both the industry average and the S&P 500.
  • PSMI, with its decline in revenue, slightly underperformed the industry average of 4.4%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: PSMI Ratings Report

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