Thursday, PMC-Sierra, Inc. (PMCS), a provider of broadband communications and storage semiconductors, reported that its profit for the third quarter rose more than five-fold from last year, which recorded a huge loss on investment securities. However, revenues were 6% lower year-on-year.
The Santa Clara, California-based PMC-Sierra reported GAAP net income of $27.82 million or $0.12 per share, compared with $4.46 million or $0.02 per share a year earlier. The last year's result included a loss on investment securities totaling $11.79 million.
On a non-GAAP basis, net income was $34.52 million or $0.15 per share, up from $29.26 million or $0.13 per share for the same quarter previous year. Eleven analysts polled by Thomson Reuters expected the company to report earnings of $0.14 per share for the third quarter. Analysts' estimates typically exclude special items.
The non-GAAP adjustments exclude stock-based compensation of $5.12 million, foreign exchange loss of $0.98 million, charges related to amortization of purchased intangible assets of $9.84 million and recovery of income tax matters of $9.88 million.
Quarterly net revenues declined by 6% to $130.88 million from restated $139.4 million in the prior year quarter. Analysts had expected the company to report revenue of $130.83 million for the third quarter.
"In the third quarter of 2009, we benefited from improved demand in our Storage business, led by the continued ramp in our new 6Gb/s SAS RAID-on-Chip device at H-P, as well as growth in our Microprocessor business," said Greg Lang, president and chief executive officer of PMC-Sierra.
In the sequentially preceding second quarter, the company's profit plunged to $7.85 million or $0.03 per share from $135.95 million or $0.60 per share, hurt partly by a hefty income tax provision as well as a 12% drop in revenues to $123.19 million. However, on non-GAAP basis, net income was essentially flat at $29.7 million or $0.13 per share.
For the quarter under review, PMC-Sierra's cost of revenues declined to $44.43 million from $47.37 million for the same period last year. While research and development expenses came down to $35.82 million from $39.69 million, selling, general and administrative expenses declined to $19.74 million from $23.56 million a year-ago.
The company reported a foreign exchange loss of $1.09 million compared to foreign exchange gain of $0.87 million last year. Recovery of income taxes was $8.58 million compared with provision for income taxes of $4.27 million a year earlier.
Among others in the industry, Broadcom Corp. (BRCM) Thursday reported a decline in third quarter profit to $84.6 million or $0.16 per share from $164.9 million or $0.31 per share in the same quarter a year ago and revenues dropped by 3.4% to $1.25 billion from $1.30 billion in the prior-year quarter.
For the nine months, PMC-Sierra's net income plunged to $31.75 million or $0.14 per share from $119.48 million or $0.53 per share a year earlier and net revenues declined to $356.64 million from $404.23 million last year.
Thursday, PMCS closed at $9.24, down $0.05 or 0.54%, on a volume of 5.90 million on Nasdaq. In after hours, the stock declined further after the announcement of company's third quarter results and traded at $9.00, down $0.24 or 2.60%. In the past 52 weeks, the stock trended in a broad range of $2.82 - $10.07, with a three-month average volume of 3.57 million shares.
BRCM closed at $30.73, up $0.42 or 1.39%, on a volume of 12.17 million on Nasdaq. However, in after hours after the announcement of results, the stock plunged by 8.88% or $2.73 and was trading at $28.00.
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