The bottom line at SigmaTel ( SGTL) went from black to red in the third quarter, thanks in part to acquisition-related charges. The chipmaker's results Tuesday were in line with Wall Street's recently reduced estimates, but the company cautioned investors that its results may fall shy of analysts' expectations in the current period. Still, investors cheered the results, bidding up the stock 50 cents, or 3.7%, to $14.15 in recent after-hours trading. In the quarter, the company lost $4.8 million, or 13 cents a share. In contrast, it earned $17.3 million, or 46 cents a share, in the year-ago period. Despite the earnings decline, sales jumped 55% to $74.4 million. The company's bottom line in the just-completed period included an $11.4 million write-off of in-process research and development assets related to three acquisitions the company made in the quarter. Excluding those charges and about $500,000 of amortization and stock-based compensation charges, the company would have earned $7.1 million, or 19 cents a share. On average, analysts polled by Thomson First Call were expecting the company to earn 19 cents a share on a pro forma basis, on $74.4 million in sales in the quarter. In the second quarter of this year SigmaTel earned $10.9 million or 29 cents a share; on pro forma basis it earned $11.1 million, or 30 cents a share, in that quarter on revenue of $69.6 million. Blaming equipment issues and back-loaded demand, the company
cut its guidance earlier this month, saying it expected to earn about 20 cents a share on $74.4 million in sales. Previously, the company estimated it would earn 30 cents to 37 cents a share on $78.6 million in sales. For the current, fourth quarter, SigmaTel predicted a profit of $3.9 million to $6.1 million, or about 10 cents to 16 cents a share, on sales of between $81 million to $91 million. Excluding stock-based compensation, amortization and other charges, the company expects to post pro forma earnings of $5.3 million to $7.6 million, or 14 cents to 20 cents a share. Wall Street predicted that the company would earn 20 cents a share in the holiday period, on this basis, on $85.9 million in sales. Shares of SigmaTel closed the regular session off 82 cents, or 5.7%, to $13.65.