Atmel's Adjusted Earnings Beats

Zacks

Atmel Corporation (ATML) reported a net loss of $12.3 million or 3 cents per share in fourth quarter 2012 compared to a net income of $32.9 million or 7 cents per share in the year-earlier quarter. The year-over-year decrease in earnings was primarily due to losses incurred on purchase commitments, restructuring activities, and write-off of receivables. Excluding one-time items, non-GAAP net income for the reported quarter was $29.4 million or 7 cents per share against $67.5 million or 14 cents per share in the year-ago quarter. The adjusted earnings for the reported quarter excelled the Zacks Consensus Estimate by 4 cents.

For full year 2012, the company reported a net income of $30.4 million or 7 cents per share compared to $315.0 million or 68 cents per share in the previous year. Excluding one-time items, non-GAAP net income for 2012 was $145.1 million or 32 cents per share versus $438.0 million or 92 cents per share in the prior year. The adjusted earnings for 2012 outpaced the Zacks Consensus Estimate of 18 cents.

The company reported net sales of $345.1 million in the fourth quarter of 2012, down 11.2% year over year. Net sales in the reported quarter, however, beat the Zacks Consensus Estimate of $341 million. For full year 2012, revenues of $1.4 billion declined 25.9% from $1.8 billion in 2011.

Balance Sheet and Cash Flows

The company ended the year with cash and cash equivalents of $293.4 million, down from $329.4 million at year-end 2011. Cash provided from operations totaled $78.7 million for the reported quarter versus $43.4 million in fourth quarter 2011. For full year 2012, operating cash flow exceeded $200 million.

Share Repurchase

The company bought back a total of 3.3 million shares at an average price of $4.87 each during the fourth quarter of 2012.

Moving Forward

The company expects to reap synergistic benefits from the acquisition of Ozmo, Inc., a leader in ultra-low power Wi-Fi solutions, in the upcoming quarters. Atmel is continuously upgrading its product portfolio to fuel growth and thwart intense competition and price wars from rivals such as Advanced Semiconductor Engineering Inc. (ASX), Diodes Incorporated (DIOD), and Rambus Inc. (RMBS), each carrying a Zacks Rank #1 (Strong Buy). Atmel presently, however, carries a Zacks Rank #2 (Buy).

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