Atmel Profits Slump

Atmel posted sharply lower second-quarter profits and missed analyst estimates, hurt by foreign income taxes and various expenses. Atmel said it earned $678,000 ($0.00/share) on revenue of $404.2M, down from $8.3M ($0.02/share) on revenue of $429.5M a year ago. The foreign taxes "substantially reduced" earnings, the company said. The results included about $15M in charges related to the special shareholder meeting in May as well as recently completed stock option backdating and other independent investigations. Stock-based compensation expense totaled $3.3M. Analysts were expecting earnings of $0.01/share on revenue of $402.6M, on average. Sales grew sequentially in all major product groups except the wireless foundry business. Gross margins were 35.0%, slightly lower than the 35.8% in Q1, but an improvement from 32.4% a year ago. For the third quarter, the company expects sequential revenue growth of 1% to 3%, which would suggest a range of $408.2M-$416M. Analysts were expecting Q3 revenue of $414.5M, on average. Atmel said it planned "additional initiatives during the remainder of 2007 to unlock shareholder value." Shares dropped 5.7% in AH trading Wednesday after losing 1.5% during regular trading.

Sources: Press release, Reuters, TheStreet.com
Commentary: With Several Possible Catalysts, Atmel Corp. Providing Good Entry Point • Dan Loeb's ThirdPoint LLC Picks Up a 7% Stake In Atmel Corp. • The Long Case for Semi Stocks
Stocks/ETFs to watch: ATML. Competitors: AMD, QI, STM, TXN, IFX. ETFs: XSD

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