Semtech stock falls as loss forecast, while Street was expecting a profit

By Wallace Witkowski

Semtech forecasts an adjusted loss between 22 cents and 9 cents a share, while Street forecast was 12 cents a share adjusted net income

Semtech Corp. shares fell Wednesday after the analog and mixed-signal chip maker forecast a loss for the current quarter while Wall Street expected a profit.

Semtech (SMTC) shares fell as much as 6% in the extended session after closing up 0.7% on Wednesday at $22.87.

The company forecast an adjusted loss of 22 cents to 9 cents a share on revenue of $190 million to $210 million for the third quarter, while analysts surveyed by FactSet had estimated adjusted earnings of 12 cents a share on revenue of $247.7 million.

"While we remain cautious given the current challenges of broader economic uncertainties and high channel inventory, I am confident that our ongoing operational refinements and strong presence in key markets keep us poised to recover as economic conditions evolve," Paul Pickle, Semtech's chief executive, said in a statement.

The company reported a second-quarter loss of $382 million, or $5.97 a share, compared with a loss of $29.4 million, or 46 cents a share, in the year-ago period. Adjusted earnings, which excludes stock-based compensation expenses and a $279.6 million goodwill impairment charge, was 11 cents a share, compared with 87 cents a share in the year-ago period.

Revenue rose to $238.4 million from $236.5 million in the year-ago quarter.

Analysts had forecast adjusted earnings of 2 cents a share on revenue of $237.4 million.

Last Wednesday, Semtech notified the Securities and Exchange Commission that it would file its quarterly report late.

Last Friday, Semtech welcomed a new chief financial officer, but lost a stock analyst's coverage. Before he discontinued coverage of the company, TD Cowen analyst Matthew Ramsay said he saw Semtech's "very tough restructuring and turnaround both far from being over."

Ramsay had said Semtech's expected goodwill impairment marked "a shockingly rapid recognition" of the impact from the company's $1.2 billion cash acquisition of Sierra Wireless. Ramsay had warned of "a potential correction coming" in the acquired business in a June note.

-Wallace Witkowski

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09-14-23 0836ET

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