(RTTNews) - Thursday, PMC-Sierra, Inc. (PMCS: News ), 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.

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