Internet infrastructure semiconductor solution provider PMC-Sierra Inc. (PMCS) reported third quarter 2010 earnings of 18 cents per share (Non-GAAP figures provided by the company), which beat the Zacks Consensus Estimate of 16 cents per share. The company had earned 15 cents per share in the year ago quarter.
The company’s non-GAAP earnings exclude the imapct of a number of items. On a GAAP basis, they earned 6 cents per share, down from 12 cents a share in the year-earlier quarter.
Revenues increased 24% from the comparable year-ago quarter to $162.3 million, marginally beating the Zacks Consensus of $162.0 million.
Results benefited from growth in microprocessor and storage business, which included contribution from the inclusion of the Adaptec Storage assets that they purchased earlier this year.
Gross profit (Non-GAAP) increased 25.6% from the year ago quarter to $108.8 million. Gross profit margin increased marginally from 66.0% in the year ago quarter to 67.0%.
Income from operations (Non-GAAP) increased 22.7% from the prior year quarter to $43.8 million. Operating margins were flat from year ago quarter at 27%.
Estimates for the quarter had been trending down in the run-up to the earnings release, with five analysts (out of the six covering the stock) lowering estimates in the last 30 days. This had brought down the Zacks Consensus by 3 cents from 19 cents. The full-year estimate for next year has been trending down in recent days as well, with four negative revisions in the last thirty days. The current Zacks Consensus Estimate for 2011 of 73 cents per share, down from 79 cents per share thirty days ago.
We currently have a Zacks # 3 rank for PMC-Sierra which translates in to a Hold rating in the short term.
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