Intersil spikes to new high after strong 2Q

Wall Street cheers Intersil under new leadership; shares spike to new 52-week high

Associated Press

NEW YORK (AP) -- Intersil shares jumped nearly 10 percent to a new high for the year Wednesday after putting up some very strong numbers for the second quarter, lifting the confidence that Wall Street has in new leadership that put into place by the chipmaker.

Late Tuesday, the Milpitas, Calif., company posted net income of $1 million, or 1 cent per share, reversing a year-earlier loss of $14.5 million, or 11 cents per share. The year-ago period included hefty restructuring charges.

Excluding one-time items, Intersil's per share earnings came in at 14 cents at a time when industry analysts were projecting a loss of 2 cents per share.

Revenue fell 11 percent to $144.8 million, which was better than the $138.2 million that Wall Street was looking for.

Industrial and infrastructure revenue grew sequentially by more than 10 percent due to strong demand in the automotive, industrial and aerospace markets. Consumer revenue rose 25 percent from the first quarter, the company said, reflecting improved demand for handsets, tablets and gaming consoles.

Intersil was stung by "challenging" conditions in the personal computer market, and revenue from that division declined.

For the third quarter, Intersil forecast an adjusted profit of 15 to 18 cents per share and revenue of $146 million to $152 million. Again, that is much better than the earnings per share of 1 cent and revenue of $141.5 million that analysts had been projecting.

Susquehanna analyst Chris Caso said Intersil has begun to "right the ship," under its new president and chief executive, Necip Sayiner, who took the helm in March.

Caso raised his target to $9 from $8 but maintained a "Neutral," rating, expecting that a complete turnaround for the company will take some time.

Craig Ellis of B. Riley wrote, "Investors should be aware that even the first new product revenue successes from the new management team are three to four quarters away, but we expect a sharp increase in (research and development) productivity."

The analyst has a "Buy" rating and also lifted his price target on the stock by $1, to $12.

In morning trading, shares of Intersil Corp. rose 93 cents to $10.18. Shares earlier hit a 52-week high of $10.65.

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