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Microsemi plunges and recovers on weaker-than-expected guidance

Microsemi (MSCC -4.5%) shares are recovering after plunging as much as 16.3% at the open on the company's in-line FQ4 but weaker-than-expected FQ1 guidance.

On the conference call, CFO John Hohener forecast a 3%-5% sequential revenue decline in FQ1, implying revenue of $238.5M-$243.1M (well below consensus expectations of $258.2M). The guidance, however, excludes effects from the $230M Symmetricom acquisition in Oct.

Gross margin is seen falling to 55.8%-56.6% in FQ1 from 57% in FQ4.

When asked whether Microsemi is still targeting organic growth rates in the mid- to high-single digit range on a long-term basis, CEO James Peterson responded, "Absolutely, my friend."

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