Semtech stock surges 7% on Q2 earnings beat

CAMARILLO, Calif. - Semtech (NASDAQ:SMTC ) Corporation (NASDAQ:SMTC (NASDAQ:SMTX )) reported better-than-expected second quarter results, sending its shares up 7.4% in after-hours trading on Tuesday.

The semiconductor company posted adjusted earnings per share of $0.11, beating analyst estimates of $0.09. Revenue came in at $215.4 million, surpassing the consensus forecast of $212.3 million and rising 4% sequentially.

"Semtech continues to execute on an established strategy to grow our business, as demonstrated by solid second quarter financial performance and a favorable outlook for our third quarter that forecasts acceleration of this growth," said Hong Hou, Semtech's president and chief executive officer.

The company's adjusted gross margin improved to 50.4% in Q2, up 60 basis points sequentially. Adjusted operating margin expanded to 14.2%, a 200 basis point increase from the previous quarter.

For the third quarter, Semtech expects revenue between $228 million and $238 million, with the midpoint above the current analyst consensus of $232.4 million. The company forecasts adjusted EPS of $0.20 to $0.26, compared to the $0.23 Wall Street estimate.

Mark Lin, Semtech's CFO, noted: "Continued improvements in these metrics, along with net sales growth in our third quarter outlook, demonstrate our commitment to prudent cost control while continuing to grow the business."

The positive results and outlook drove the stock's 7.4% jump in extended trading, as investors cheered Semtech's execution and growth trajectory amid a challenging semiconductor market environment.

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Source: Investing.com