Wednesday, integrated system-on-chip solutions provider Sigma Designs Inc. (SIGM), reported a sharp decline in profit for the second quarter, reflecting a double-digit drop in revenues from last year. Earnings were in line with Street expectations while revenues fell short of estimates.
The Milpitas, California-based company's net income for the second quarter decreased significantly to $4.80 million or $0.18 per share from $9.60 million or $0.35 per share in the same quarter last year.
Excluding items, net income for the quarter decreased to $7.80 million or $0.28 per share from $12.74 million or $0.47 per share in the same quarter last year.
Non-GAAP adjustments for the second quarter consisted of $0.80 million in amortization expense for acquired intangibles related to the Zensys, VXP and Blue7 acquisitions and $2.2 million in non-cash share-based compensation expenses.
On average, four analysts polled by Thomson Reuters expected the company to earn $0.28 per share for the quarter. Analysts' estimate typically exclude one-time charges and gains.
Quarterly revenues dropped 12% to $51.30 million from $58.21 million last year, shy of analysts consensus estimate of $51.48 million for the quarter.
Gross profit margin for the quarter declined to 45.3% from 50.7% in the year-ago quarter.
Research and development expenses for the quarter increased to $11.72 million, up from 10.40 million in the previous year quarter. Sales and marketing expenses increased to $3.50 million from $2.80 million a year ago. General and administrative expenses slid to $3.62 million from $3.63 million in the prior-year quarter.
Total operating expenses for the quarter rose to $18.82 million from $16.80 million in the same quarter a year ago.
Income from operations for the quarter was $4.43 million, compared to $12.72 million in the previous-year quarter.
Thinh Tran, Chairman and Chief Executive Officer, Sigma Designs said, "We feel that our primary markets have shown continued stability in the face of a difficult economy and we are continuing to place heavy efforts on bolstering sales as well as expanding the breadth of our market opportunities."
For the six-month period, net income plunged to $7.54 million or $0.28 per share from $16.20 million or $0.57 per share in the year-ago period. Excluding items, net income for six months declined to $16.05 million or $0.59 per share from $26.35 million or $0.93 per share last year.
Revenues for the six months decreased to $102.53 million from $115.10 million in the corresponding period last year.
SIGM closed Wednesday's trading at $17.12, up $0.47 or 2.82%, on a volume of 4.80 million shares on the Nasdaq. In after hours, the stock lost $0.92 or 5.37%, trading at $16.20.
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