NEW YORK (TheStreet) -- Atmel (ATML - Get Report) was falling 10.07% to $7.36 on Thursday morning after the semiconductor manufacturer reported fourth-quarter earnings that fell short of analysts' expectations.
The company reported earnings per share of 10 cents, up from 7 cents in the same period a year earlier, but narrowly missed the consensus estimate of 11 cents. Revenue also increased 2.3% year over year to $353.2 million from $345.1 million, but this was also short of analysts' expectations of $357.37 million.
"Revenue for our microcontroller business increased during 2013, with the core microcontroller business generating robust growth," said President and CEO Steve Laub in the company's statement. "We are well positioned for 2014 with multiple growth drivers tied to our extensive new product introductions and significant margin expansion from ongoing operational initiatives."
TheStreet Ratings team rates ATMEL CORP as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about its recommendation:
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"We rate ATMEL CORP (ATML) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 53.22% to $82.06 million when compared to the same quarter last year. In addition, ATMEL CORP has also vastly surpassed the industry average cash flow growth rate of -75.92%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- ATML, with its decline in revenue, slightly underperformed the industry average of 4.4%. Since the same quarter one year prior, revenues slightly dropped by 1.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 74.9% when compared to the same quarter one year ago, falling from $21.64 million to $5.43 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, ATMEL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ATML Ratings Report