Micrel Plunges on Slowdown

Sequential growth targets disappoint.
Author:
Publish date:

Micrel

(MCRL)

fell 14% after warning that growth will slow in the second quarter.

The San Jose, Calif.-based company earned $8.7 million, or 10 cents a share, in the first quarter, compared with $6.6 million, or 7 cents a share, a year ago. Excluding stock based expenses, the company earned $10.9 million, or 13 cents a share. Analysts polled by Thomson First Call were expecting earnings of 12 cents a share in the most recent quarter.

First-quarter revenue rose 12% to $68.2 million as against analysts' expectation of $68.16 million.

In its outlook, the company estimates a 2% to 6% sequential rise in revenue based on the current backlog levels and demand estimates.

Operating margins for the quarter increased 403 basis points to 19.73% from the previous year and gross margin increased 848 basis points to 58.54%.

"Demand from customers serving the industrial and communications end markets resulted in continued bookings strength and solid revenue growth in what is historically a seasonally weak quarter for Micrel," stated Ray Zinn, president and CEO of Micrel. "Furthermore, we are pleased to report that Micrel achieved a first quarter gross margin of 58.5%, the highest quarterly gross margin in the company's history."

Investors were less pleased, sending the stock down $2.13 to $13.65.

This story was created through a joint venture between TheStreet.com and IRIS.