Updated from Oct. 22
a day after the company offered guidance a few million dollars short of Wall Street estimates. On Wednesday the analog chipmaker posted in-line sales results and beat expectations in its third quarter, which also saw the sale of its wireless LAN business.
But investors pumped up by outsized results from other chipmakers were expecting more. In mid-morning trading the stock cratered by $3.38 or 12% to $24.90.
"While we believe Intersil's results were acceptable, the magnitude of momentum being seen in most end-markets pointed to a potentially stronger performance," noted Legg Mason analyst, calling investors' near-term disappointment understandable. He has a buy on the shares; his firm hasn't banked for Intersil.
Sales rose 10.3% from last year to $130.5 million, in line with expectations.
According to generally accepted accounting principles, net income from continuing operations was $2.7 million, or 2 cents a share, up from a loss of $7.8 million a year ago. Continuing operations exclude Intersil's WLAN business, which it sold to
during the quarter.
Including the WLAN business, Intersil would have seen a per-share profit of 6 cents.
Excluding amortization of intangibles and other items not related to ongoing operations, non-GAAP net income for the third quarter was $22.7 million or 16 cents per diluted share of common stock, a penny above expectations.
In a statement, CEO Rich Beyer said the company's continuing product groups grew 22% over the previous year, while its Elantec and Power Management product groups reached record revenue levels in the quarter due to strength in the DVD recordable and computing markets.
Going forward, Beyer forecast it expects revenue to grow between 4% and 5% on a sequential basis, to about $136 million. Earnings should increase to 18 cents.
The sales outlook is a hair below Wall Street projections for $138 million, though the EPS number matches expectations.
Following the WLAN sale for $365 million, Intersil exited the quarter with $917 million in cash and investments.