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Atmel: Moving Ahead Steadily

April 06, 2014 | About:
mitu77

mitu77

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Various chip manufacturing companies reaped the booming Smartphone market in the past. We also noticed a paradigm shift of companies who were basically OEM for PC market showing willingness to join the bandwagon of Smartphone market as chip manufacturer. Atmel (ATML) is one such company that was focused on touch controller sensors to broaden it horizon of its core micro controller business.

The performance of the company in the past could not impress the investors. But, it seems with persistence efforts of the company it has started showing positive results to gain confidence in its investors. The company recently declared it quarterly results and was remarkable.

Financial performance

It has been a rough journey for the company in the past but it seems its finally taking a U-turn in its journey. The fourth quarter reported a sales revenue of $353.2 million and was up by $8.1 million from year ago quarter that recoded $345.1 million. This was basically due to higher sales from its micro controller segment. The quarter might have seen a growth, but on annual basis the total revenues in the fiscal 2013 was lower ($1,386 million) as compared to fiscal 2012($1,432.1 million.

The non GAAP net income was also ramped up in the fourth quarter that recorded $43.6 million ($.10 per share) as against $29.4 million ($.07 per share) year ago quarter.

On a year over year basis, the company’s bottom line was not so impressive. Major restructuring and low revenues in fiscal 2013 resulted in posting a bottom line as a negative growth. For complete fiscal 2013, non GAAP net income was posted as $120 million ($.27 per share) as against $145.1 million ($.32 per shares) in fiscal 2012.

Journey Ahead

Atmel is heavily relying on it touch controller that has big potential as components in various devices like Smartphone and Tablet. The company is also focused on the PC segment that is enabled with windows 8x operating system. The company is enriching its product portfolio that will enable it to attain a higher sales volume. The maXTouch controller designed by Atmel is also winning the confidence of various manufacturers of Windows 8x enabled PC for touch enabled PC screens.

Companies like Asus and Sony have already endorsed this product this gives a brighter future for Atmel. Lenovo is another company that is looking to tap the market of touch screens and Atmel did win the order with Lenovo. This enables Atmel for a steady growth in future.

Ever since the launch of Windows 8, sales of touch enabled PC is witnessing a constant growth. This will enable growth of Atmel and can also be a perfect breather, considering the fact when it witnessed a decline in sales revenue in the past.

maXTouch® riding high

  1. It is selected by Sony Playstation 4
  2. Samsung releases new Smart TV remote control touch, powered by maXTouch.
  3. Other bigger players like ASUS, Toshiba, HP, LG are also featuring maXTouch for windows 8x designs on various hand held devices.

Competitor

The company does face stringent competition in the micro controller arena by other players like Texas Instruments, Microchip Technology and Synaptics.

Synaptics (SYNA), a head on competitor for Atmel in touch controller and micro controller segment. The company also has a diverse product mix which offers low risk to the company as it’s not dependant to specific market segment.

Synaptics declared its Q2 2014 recently, and its numbers indicate that it’s on a growth path. The company posted revenue of $205.8 million. This is a phenomenal growth of 44% compared with the same quarter last year which recorded $143 million. Net income of $17.3 million was again a growth by over $6.2 million as against the comparable quarter last year which reported a net income of 11.1 million. EPS increased by 45% to record $0.48 and against $$0.33 in the same quarter last year.

In order to fuel its constant growth, the company is establishing itself as a forefront player in Smartphone market and wider touch screen markets. It has a strong foothold in various countries like china, where we see a phenomenal market growth due to emerging economy. The company is confident of revenue growth from tablets and large touch screen products, and is equally sure of seeing yet another year of strong annual top-line growth going forward.

Conclusion

Atmel has been certainly emerging out from the dark phase in the past. The company has been winning order by as suppliers to major manufacturers. It is also constantly releasing new products which are a good sign as it shows its persistence to acquire a bigger market share and keep the competitors on the run. The company heavily relied on windows 8x touch screen and it paid off as its now being select by major PC , tablets and net book manufacturers that are windows 8 enabled.

The company also safeguards the interest of the investor by implementing various shares re-purchase programs. As a part of its Share repurchase program, the company implemented the share repurchase program in the recent quarter. It repurchased $3.3 million shares at an average price of $7.36 each. Ever since the inception it has repurchased total shares of $661 millions. This further goes on to conclude that Atmel can be good for long.


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