Atmel, Corp (ATML) posted a record high revenue level last quarter and estimates are on the rise. With shares holding a Zacks #1 Rank (Strong Buy) the stock is poised for a great 2011.
Additionally, management is expected to update guidance in June. If they move the outlook higher shares could really take off.
Company Description
Atmel makes microcontrollers, capacitive touch solutions, advanced logic and other highly technical products. The company’s offerings are used in industrial, consumer, communications, computing and automotive applications.
Revenue Hit Record High
Atmel said its first quarter revenue grew 32% since last year to a record-high $461 million, over $8 million more than analysts expected. Quarterly results came out on May 4 and included results from the a divestiture. If that is adjusted the revenues rose 43%.
Net income was $74.6 million, up dramatically from $16.6 million a year ago. That works out to $0.16 per share and was a penny better than expected. Not a huge surprise but enough to give Atmel its third consecutive beat.
The company continues to buy back shares, repurchasing 5.7 million last quarter and authorizing another $300 million worth.
Cloudy Outlook
Atmel said that it revenue to land between $466 and $480 million this quarter, a 1-4% increase. That lead to shares opening lower on the new as analysts were expecting $473 million and in this market, guiding in-line with expectations is just not enough.
But, that could change next month. Atmel alluded to updating guidance in June at a Barclays conference. Of course that could go either way, but for now estimates are up.
Full-year estimates are averaging $0.77 for this year, up 6 cents on the earnings results. Next year’s Zacks Consensus Estimate rose 8 cents, to $0.95 per share. Last year Atmel earned $0.48, so expected growth rates are now 60% and 24%, respectively.
Shares of ATML are exchanging hands at about 18 times that 2011 estimate, not too bad. But factor in the almost 19% expected long-term growth rate and you get a PEG of 1.0 and a solid value.
The Chart
ATML is no stranger to volatility, but after taking a look at the long-term earnings trend it looks like that risk may be worth taking. Solid year-over-year growth and consistent rising throughout the year are both great signs.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service
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