Leading Wi-Fi chip maker Atheros Communications, Inc. (ATHR) reported revenues of $226.8 million, down 8% sequentially but grew 22% year over year and beat the Zacks Consensus Estimate of $222 million.
Computing channel revenue decreased 34% sequentially and accounted for 17% of total revenues. Management had anticipated a slowdown in demand for PC products and the sales came in weaker-than-management’s expectations.
PC wireless LAN revenue declined in Q4 while shipments of ethernet and Bluetooth products both increased sequentially.
Networking channel revenue was down 11% sequentially and represented 49% of total revenue. Revenues from consumer channel accounted for 34% of total revenues were up 21%sequentially.
Revenue from shipments of 11n products decreased sequentially in the fourth quarter primarily due to slowing demand from computing channel.
11g revenue increased 12% sequentially as the ramp in consumer channel shipments was driven primarily by products featuring our legacy 11g solutions.
Gross margin came in at 49.6%, marginally down from 49.7% posted in the third quarter of 2010 and 50.2% in the year-ago quarter as favorable product mix offset decline in prices. Operating margin came in at 18.9%, down from 22.1% in the third quarter of 2010 and 23.4% in the year-ago quarter.
Operating expenses increased $1.3 million sequentially to $69.6 million. Atheros reported a net loss of $23.2 or 32 cents per share compared to a net income of $28.1 million or 39 cents per share in the third quarter of 2010 and a net income of $15.6 million or 24 cents per diluted share in the year-ago quarter.
During the quarter, Atmel reported a legal settlement charge of $33.7 million. Excluding one-time charges but including stock-based compensation, EPS came in at 38 cents, beating the Zacks Consensus Estimate of 32 cents.
Atmel reported revenues of $926.8 million in 2010, up 71% from a year ago. Net income for 2010 came in at $54.4 million or 75 cents per share compared to a net income of $46.4 million or 73 cents per share in 2009.
Atmel ended the quarter with cash, equivalents and marketable securities of $515.8 million, up $40.8 million from $475 million at the end of September.
Earlier, Qualcomm Inc. (QCOM), the largest global manufacturer of mobile phone chipsets, has decided to acquire Atheros for around $3.2 billion. The acquisition is expected to be completed by the end of June.
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