Monday, semiconductor system solutions provider Atheros Communications Inc. (ATHR), reported a significant rise in profit for the third quarter ended September 30, reflecting an increase in revenues, notwithstanding the lower adjusted gross margins in the quarter.
The Santa Clara, California based company's third quarter net income rose to $38.58 million or $0.60 per share from $10.09 million or $0.16 per share a year earlier.
On adjusted basis, the company reported a net income of $29.30 million or $0.46 per share from $23.36 million or $0.37 per share for the year-ago period. Adjustments included total stock-based compensation of $10.40 million and tax benefit from favorable settlement of foreign tax liability of $21.71 million.
On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $0.38 per share. Analysts' estimates typically exclude special items.
Revenues for the quarter increased to $156.64 million from $138.06 million in the year earlier period. Twenty-two Wall Street analysts expected revenues of $147.26 million for the quarter.
Non-GAAP gross margins declined to 48.4% from 49.4% a year earlier. Atheros' cost of goods sold rose to $81.05 million from $69.94 million in the prior year period. Total operating expenses increased to $59.23 million from $54.29 million a year-ago.
Income from operations for the quarter was $38.6 million, compared to $10.1 million in the corresponding quarter last year.
Craig Barratt, Atheros' president and chief executive officer said, "While the economic environment worldwide continues to be challenging, the strength of our product cycles and the increasing diversification of our business enabled us to achieve record top and bottom-line results this quarter.
Barratt indicated that the company's pending acquisition of Intellon would further broaden its communications solutions portfolio.
For the nine-month period, net income increased to $30.77 million or $0.49 per share from $23.63 million or $0.38 per share in the year-ago period. Net revenues declined to $356.79 million from $374.10 million last year.
The company reported non-GAAP net income of $45.53 million or $0.72 per share, down from $59.55 million or $0.96 per share in the year-ago period.
Monday, ATHR closed at $27.8, up $1.04 or 3.89%, on a volume of 3.35 million on the Nasdaq. In after hours, the stock further gained $0.20 or 0.72%, trading at 28.00.
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