July 25--Shares of Austin-based Silicon Laboratories Inc. tumbled Thursday after the company reported a sales outlook that missed Wall Street expectations.
Shares dropped 11.78 percent, or by $5.20, to close at $39.39.
The company earned $12.6 million, or 29 cents per share, in the three months ending June 29. That compares with $20.5 million, or 47 cents, a year earlier. The chipmaker said net income fell because of acquisition-related costs.
Excluding stock compensation and other one-time items, the company said that it earned 50 cents per share. That matched expectations, according to FactSet.
Revenue rose 4 percent to $141.5 million in the second quarter, below the $143.7 million analysts expected.
CEO Tyson Tuttle was positive about the company's future, noting the completion of Silicon Labs' acquisition of Energy Micro, a well regarded Norwegian company that is a leading designer of low-power microcontroller chips.
Silicon Labs agreed to pay $115 million in cash for Energy Micro, which has 85 employees and is expected to contribute about $7 million in revenue to Silicon Labs in the second half of this year.
Analysts have said the acquisition will bolster Silicon Labs' entry into the market for low-power microcontrollers that are compatible with the basic designs by ARM Holdings, the leading architect for technologies used in most smartphones and tablet devices.
"This was our largest acquisition in the history of the company, and it brought 250 new products to our portfolio," Tuttle said. "This really provides a great path for us going forward, and it enables us to compete with the largest semiconductor companies on equal or better footing. We feel like the company has never been better positioned for growth."
For the third quarter, the company said it expects revenue to come in between $144 million and $149 million. That is below the $152.3 million analysts had previously projected.
Analyst Cody Acree with Williams Financial Group said the company's stock took a hit because its third quarter revenue "is lighter than we had hoped. It's leaving investors with a lot of questions. In the absence on answers, you sell the stock."
Silicon Labs makes a range of chips that employ digital and analog circuitry and are used in markets that include audio, automotive, broadcast, communications, computing, consumer electronics and industrial systems.
The company has about 1,000 employees worldwide, with about 60 percent of them based in Austin.
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