Zacks_Analysts' Blog : Atmel Reports In Line - Analyst Blog

Atmel Corporation (ATML) reported revenues of $487.6 million in the second quarter of 2011, up 22% year over year and up 4% sequentially and at the high end of the company’s guidance. Excluding the impact of the divestiture of the Smart Card business, revenues grew 31% year over year.

Adjusting for the Smart Card divestiture completed at the end of the third quarter of 2010, second quarter 2011 revenues increased 31% from the second quarter of the prior year.

Microcontrollers business generated revenues of $302 million, up 3% sequentially and up 53% year over year. Industrial applications continue to be the largest end-market, followed by smartphones and tablets, and the consumer market. MaXTouch revenues generated strong sequential growth in the second quarter as the sales of smartphones and new tablets based on the Android operating system increased rapidly.

Revenues from the nonvolatile memory segment came in at $71 million, up 12% sequentially but down 3% year over year. The sequential improvement in the memory business was primarily due to the increased wafer supply allocation.

Revenues from the RF and automotive segment grew 3% sequentially and 16% year over year to $53 million in the second quarter of 2011.

Revenues from the ASIC segment came in at $53 million, down 1% sequentially and down 32% from the second quarter of 2010.

Net income came in at $90.9 million or $0.19 per diluted share compared to a net income of $74.6 million or $0.16 per diluted share in the previous quarter and a net loss of $36.4 million or $0.08 per diluted share in the second quarter of 2010, in line with the Zacks Consensus Estimate.

Gross margin came in at 51.8%, up from 51.0% in the first quarter of 2011 and 40.6% in the second quarter of 2010. The sequential improvement in gross margin was primarily due to the result of a favorable one-time invoicing adjustment from a sub contactor.

Operating income came in at 23.2%, up from 17.7% in the first quarter of 2011 and an operating loss of 20.1% in the second quarter of 2010.

During the second quarter of 2011, Atmel repurchased 2.0 million shares of its common stock in the open market at an average price of $13.64. Since the inception of the buy-back program, Atmel has spent approximately $202 million to repurchase 19.5 million shares. 

Atmel generated $42.6 million of cash from operations, down from $74.1 million in the first quarter of 2011 and $49.2 million in the second quarter of 2010. Capital expenditures were approximately $24 million in the second quarter, down from $31 million in the first quarter.

Going forward, Atmel expects revenues to be flat or up 4% sequentially. Atmel now expects maXTouch revenues to exceed $350 million in 2011, up from the previous forecast of $300 million. The phenomenal growth is driven by the continued rapid growth of smartphones, the rise of Android tablets and the penetration into new high-volume applications.