SAN FRANCISCO --
grew its top line by 20% in the second quarter, thanks to steady sales of its networking and communications chips.
But the chipmaker's report of a spike in inventory as well as sequential decline in its gross margin may have accounted for a selloff in after-hours trading, when the stock slipped $1.08, or 3.52%, to $29.60.
The Santa Clara, Calif., chipmaker had revenue of $121.5 million in the three months ending June 30, compared with $100.8 million at this time last year. The average analyst expectation called for sales of $120.7 million, according to Thomson Reuters.
Atheros posted net income of $10.1 million, or 16 cents a share, compared with $9.3 million, or 16 cents a share, in the year-ago period.
Excluding about $10 million in stock compensation and acquisition-related amortization charges, as well as $1.4 million in long term investment impairments -- likely from a write-down of its auction rate securities -- and a $1 million tax benefit, Atheros said it earned 31 cents a share.
Analysts polled by Thomson Reuters were looking for EPS of 30 cents, excluding stock compensation expenses.
"We experienced broad-based growth across our PC OEM, Networking and Consumer channels and continued growth of our Ethernet and Mobile WLAN product revenues," said CEO Craig Barratt in a statement. He said that revenue from Atheros' newest generation of WiFi chips based on the 802.11n standard, grew 50% sequentially.
Atheros' adjusted gross margin was 50.8%, down from 51.2% from the first quarter.
The company's experienced a sharp, 22% jump in its inventory to $45.8 million in the second quarter however.
Atheros did not provided financial guidance for the current quarter, although it is scheduled to host a conference call Thursday to discuss its results.