Knobias Clip Report (10-21-2008) VLTR
Submitted By Knobias ClipReport
VLTR: Management Discusses Positive Earnings and Cautious Outlook for Q4
By Fain Hughes, fhughes@knobias.com
Volterra Semiconductor Corporation (VLTR) reported financial results on Monday for its third quarter ended September 30, 2008.
Net revenue for the third quarter of 2008 was $30.6 million, a 62% increase over net revenue of $18.9 million for the third quarter of 2007 and a 7% increase over net revenue of $28.7 million for the second quarter of 2008. Non-GAAP net income was $6.5 million, or $0.25 per share (diluted), for the third quarter of 2008, a 215% increase over non-GAAP net income of $2.1 million, or $0.08 per share (diluted), for the third quarter of 2007.
Jeffrey Staszak, President and CEO of Volterra, commented in a conference call, “Overall, we hit most of our target ranges on our financial model. Bookings came in slightly weaker for the quarter, but we are resonably well positioned from a backlog standpoint going into Q4. While we expected gross margins to remain in the 56% range for the quarter, we had a nice upside due to better than expected supplier cost reductions and yield improvement activities.”
Mr. Staszak provided an outlook for Q4 and said, “We believe that the current macro-economic environment will have some impact on our Q4 business. However, it is difficult to measure that, so we are taking a more conservative approach to our Q4 guidance. We anticipate Q4 revenues of $26 million-$30 million and Q4 non-GAAP EPS of $0.16-$0.24. We expects Q4 non-GAAP gross margins to be in the 56% range.”
He continued, “We plan on sticking to our proven strategy of gaining market share, adding new customers and further penetrating our existing base of customers as new products and platforms are launched.”
“While we expect our server and storage business to be flat to slightly down in Q4, growth will resume following Intel’s launch of its third platform in mid-Q1 and AMD’s launch in the second half of 2009. We expect increased growth for notebook revenue in Q4, and we expect our comps business to remain relatively flat.”
Mike Burns, CFO of Volterra, commented on the third quarter and outlook for Q4 in the conference call. He said, “This was a strong period for execution. We generated over $12 million in cash during Q3. That is more than twice as much as we ever have.”
He added, “Although we continue to gain market share in each of our four market segments, it is natural that the recent global financial crisis would impact our customer order rates to some degree. We have a flexible business model, and we expect quarterly gross margins to return to the 56% range. We also expect to reduce operating expenses in Q4.”
PiperJaffray upgraded VLTR today to Buy from Neutral. Caris lowered their target for VLTR to $13 from $18 to reflect the Company’s cautious Q4 guidance, but the firm thinks the stock is a buy at current levels.
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