M&A

18 November, 2009

UPDATE 1-Semtech Q3 profit misses Street, shares fall

* Q3 adj EPS $0.19 miss estimates by 2 cents

* Q3 rev down 6 pct

* Sees Q4 sales flat to up 4 pct sequentially

* Says to buy Sierra Monolithics for $180 mln

* Shares fall 6 pct in extended trade

Nov 18 (Reuters) - Semtech Corp (SMTC.O), which makes analog and mixed-signal semiconductor products, posted an adjusted quarterly profit that missed estimates, and said it has agreed to acquire privately held Sierra Monolithics Inc for $180 million in cash.

Shares of the company were down 6 percent at $16.00 in trading after the bell.

The acquisition will enhance Semtech's presence in the communication infrastructure and defense markets, it said.

Semtech expects the transaction to immediately add to its adjusted earnings per share and adjusted gross margins.

However, the company expects to incur a one-time tax liability of about $33 million in third quarter of fiscal 2010. [ID:nWNAB7749]

For the third quarter ended Oct. 25, Semtech posted a net loss of $20.9 million, or 34 cents per share, compared with a net profit of $11.5 million, or 19 cents per share, a year earlier.

Excluding items, the company posted earnings of 19 cents a share. Revenue fell 6 percent to $75.1 million.

Analysts on average expected earnings of 21 cents a share, excluding exceptional items, on revenue of $72.5 million, according to Thomson Reuters I/B/E/S.

The results reflect a one-time tax expense of $32.8 million, the company said in a statement.

The company forecast fourth-quarter earnings of 15 cents to 17 cents a share, with revenue flat to up 4 percent sequentially.

This excludes any financial results associated with the pending Sierra Monolithics acquisition.

Shares of the company were down 98 cents at $16. They closed at $16.98 Wednesday on Nasdaq. (Reporting by Shrutika Verma in Bangalore; Editing by Unnikrishnan Nair)

Source: http://www.reuters.com