Sil­i­con Labs’ gains clouded by fore­cast

Af­ter im­prov­ing its re­sults for 2nd quar­ter, Austin com­pany un­der­whelms with its out­look

Austin American-Statesman - - BUSINESS - By Kirk Laden­dorf

Sil­i­con Lab­o­ra­to­ries Inc. re­ported record sec­ond-quar­ter fi­nan­cial re­sults Wed­nes­day, but that wasn’t enough to please in­vestors, who sent the com­pany’s stock price lower.

The Austin-based chip com­pany’s rev­enue fore­cast for the cur­rent quar­ter — be­tween $136 mil­lion and $141 mil­lion — was slightly less than an­a­lysts were ex­pect­ing.

Sil­i­con Labs, which makes sales in a wide va­ri­ety of mar­kets, said it made a profit of $21 mil­lion, or 44 cents a share, on rev­enue of $134.6 mil­lion dur­ing the three-month pe­riod that ended July 3. Ex­clud­ing one-time items, the com­pany re­ported sec­ond-quar­ter earn­ings of 72 cents per share.

The rev­enue fig­ure —which rep­re­sents a sec­ond-quar­ter record for Sil­i­con Labs — com­pares with rev­enue of $104.2 mil­lion in the same three months last year, for which the com­pany booked a profit $9.7 mil­lion, or 21 cents per share.

Chief ex­ec­u­tive Ne­cip Sayiner said his com­pany’s rev­enue over the past four quar­ters topped the half-bil­lion-dol­lar mark, adding that he ex­pects more growth ahead.

“We be­lieve the com­pany will con­tinue on its path to sus­tained top-and bot­tom-line growth,”

he said, re­fer­ring to rev­enue and profit.

But in­vestors sent the stock price down­ward. Sil­i­con Labs’ stock closed at $41.27 a share, down $1.48, or 3.5 per­cent.

Ian Ing, an an­a­lyst with Gleacher & Co., said he is concerned that Sil­i­con Labs’ promis­ing sales of TV tuner chips may face price-cut­ting pres­sure from com­peti­tors and that the com­pany’s ship­ments of FM chips to cell phone mak­ers could con­tinue to de­cline.

“Al­though we do not dis­pute (Sil­i­con Labs’) tal­ents and am­bi­tion, we re­main on the side­lines” un­til its TV tuner busi­ness grows larger, Ing wrote in a re­port.

Sil­i­con Labs em­ploys 800 peo­ple world­wide and con­tin­ues to hire peo­ple.

The com­pany is open­ing up a sec­ond floor at its of­fice build­ing at 200 W. Ce­sar Chavez St. for more work­ers. Sil­i­con Labs’ space avail­able down­town meets the com­pany’s growth needs “for the next few years,” Sayiner said.

“We are con­tin­u­ing to grow and add head count and in­vest in the busi­ness,” he said. “We are get­ting good trac­tion in our mar­kets and adding new prod­ucts and new cus­tomers.

“We are still hav­ing fun,” Sayiner said. “What’s not to like?”

Ne­cip Sayiner ‘We are still hav­ing fun’ at Sil­i­con Labs, CEO says in sum­ma­riz­ing com­pany’s plans for prod­ucts, growth.

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