The company reported revenues of US$32 million, down 6.6% quarter-over-quarter and 18.4% year-over-year, and an earnings per share loss of US1¢.
Despite the disappointing results, Raymond James analyst Sera Kim maintained her "outperform" rating on the stock and left her US$2.75 price target, which represents upside of almost 50%, unchanged.
She told clients in a research note that Zarlink's strong cash position, sizeable tax assets, and opportunities to monetize certain assets to provide incremental funds, leave it vulnerable to "some type of action to increase value for investors."
She added that if no near-term action is taken, patient investors can take solace in the fact that Zarlink is still on track for longer-term growth in its four targeted markets that include integrated circuits for converged networks, parallel fiber optics modules, ultra-low power for medical applications and high-performance analog foundry services.
ZL 1-yr chart: