Integrated circuits maker Standard Microsystems Corp. (SMSC), Tuesday reported a decline in profit for the second quarter, as lower margins more than offset a growth in sales. Quarterly earnings missed Street estimates by a penny, while sales came in line with expectations.
Going forward, the company detailed a weak outlook for the third quarter, with both earnings and sales indicated to miss Street expectations. Following the news, SMSC stock tumbled over 7 percent in extended trade on the Nasdaq.
Standard Microsystems posted a second quarter profit of $11.9 million or $0.51 per share, down from $12.9 million or $0.57 per share last year.
Excluding items, profit for the quarter was $8.4 million or $0.36 per share, compared to $11.5 million or $0.51 per share in the prior year.
On average, six analysts polled by Thomson Reuters expected earnings of $0.37 per share for the quarter. Analysts' estimates typically exclude special items.
Sales for the quarter increased 8 percent to $112.6 million from $104 million last year. Wall Street analysts expected sales of $112.63 million for the quarter.
Results for the quarter included $8.7 million in sales related to the BridgeCo acquisition in May this year.
Nonetheless, the sales growth was offset by lower gross margins that declined to 53.6 percent from 56.4 percent last year. Excluding items, gross margin slipped to 54.6 percent from 57.4 percent last year.
During the quarter, the company incurred higher research expenses at $22.6 million, as compared to $19.7 million last year.
For the third quarter, the company expects non-GAAP earnings in the range of $0.30 to $0.37 per share and sales of $105 million to $110 million. The Street currently anticipate earnings of $0.45 per share on sales of $117.23 million for the quarter.
SMSC closed Tuesday's regular hours at $20.52, up $1.02 or 5.23%, on the Nasdaq. In after hours, the stock tumbled 7.46%.
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