Standard Microsystems Whiffs on Earnings

Seth Jayson, The Motley Fool
Updated

Standard Microsystems (NAS: SMSC) reported earnings on Jan. 9. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Nov. 30 (Q3), Standard Microsystems met expectations on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue contracted slightly, and earnings per share shrank.

Gross margins shrank, operating margins grew, and net margins increased.

Revenue details
Standard Microsystems logged revenue of $106 million. The seven analysts polled by S&P Capital IQ wanted to see sales of $107 million. Sales were 0.8% lower than the prior-year quarter's $107 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.21. The six earnings estimates compiled by S&P Capital IQ forecast $0.34 per share on the same basis. GAAP EPS were -$0.15 for Q3 against -$0.20 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 50.1%, 200 basis points worse than the prior-year quarter. Operating margin was 0.1%, 590 basis points better than the prior-year quarter. Net margin was -3.1%, 120 basis points better than the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods.

Looking ahead
What does the future hold?

Next quarter's average estimate for revenue is $96 million. On the bottom line, the average EPS estimate is -$0.17.

Next year's average estimate for revenue is $422 million. The average EPS estimate is $0.88.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 63 members out of 67 rating the stock outperform, and four members rating it underperform. Among 22 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 19 give Standard Microsystems a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Standard Microsystems is buy, with an average price target of $29.83.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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