Semiconductor maker Semtech saw a boost in its stock value after posting an unexpected adjusted profit in the third quarter. The stock jumped by 20% to $20.06 during midday trading, marking its largest percent increase since March 2020. Despite being down 31% for the year, this positive news brought some relief to investors.
In the three months ending on October 29, Semtech reported a loss of $38.3 million, or 60 cents per share. This is in comparison to a profit of $22.7 million, or 36 cents per share, during the same period last year. However, analysts had predicted a loss of 68 cents per share, meaning that Semtech actually exceeded expectations.
When adjusting for certain one-time items, Semtech showed an adjusted profit of 2 cents per share. This is a significant improvement from the 15-cent loss forecasted by analysts. The company had initially projected an adjusted loss ranging from 22 cents to 9 cents per share.
In terms of revenue, Semtech saw an increase to $200.9 million, surpassing the $200.5 million forecasted by analysts. This demonstrates solid growth compared to the $177.6 million reported a year ago.
CEO Paul Pickle attributed the positive results to increased demand in end-markets such as high-end consumers and data center applications.
Looking ahead to the fiscal fourth quarter, Semtech anticipates sales ranging from $180 million to $200 million. Analysts, however, expect sales to reach $190.7 million.
Additionally, Semtech provided adjusted earnings guidance of a per-share loss between 11 cents and a profit of 1 cent. This differs from analysts’ expectations of a per-share loss of 4 cents.
Overall, Semtech’s performance in the third quarter has instilled confidence in investors and the semiconductor industry alike.