Thursday, February 7, 2013

Why Atmel Shares Tanked

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Atmel (NASDAQ: ATML  ) have tanked today by as much as 15% after the company reported earnings.

So what: Revenue in the quarter came in at $345.1 million, with non-GAAP earnings per share of $0.07. Revenue was a beat but adjusted earnings were right on target with forecasts. The company's microcontroller business continues to grow but the overall business is suffering from a slow semiconductor market.

Now what: Atmel said it expects revenue in the current quarter to be in the range of $311 million to $328 million, while investors were expecting sales of $332.8 million. Canaccord Genuity is defending shares, saying the plunge is a buying opportunity as Atmel's addressable market expands with the ramp up of Microsoft Windows 8, where Atmel is the leading provider of touchscreen controllers. The analyst believes we're seeing a cyclical bottom and the business should begin recovering in the second quarter.

Interested in more info on Atmel? Add it to your watchlist by clicking here.

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