Overview

* Semtech ( SMTC ) fiscal Q2 net sales rise 20% yr/yr, beating analyst expectations

* Adjusted EPS for fiscal Q2 exceeds estimates, per LSEG data

* Co reports GAAP operating margin loss due to goodwill impairment

Outlook

* Semtech ( SMTC ) forecasts Q3 net sales at $266 mln +/- $5 mln

* Company expects Q3 adjusted EPS of $0.44 +/- $0.03

* Semtech ( SMTC ) anticipates Q3 adjusted operating margin of 19.6% +/- 80 bps

* Company projects Q3 adjusted EBITDA of $60 mln +/- $3 mln

Result Drivers

* CUSTOMER ENGAGEMENT - Co attributes strong sales growth to deep customer engagement and operational discipline

* DEBT REDUCTION - Accelerated debt reduction contributed to improved financial performance and reduced net leverage ratio

* GOODWILL IMPAIRMENT - GAAP operating margin loss impacted by goodwill impairment

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q2 Sales Beat $257.60 $256.10

mln mln (12

Analysts

)

Q2 Beat $0.41 $0.4 (13

Adjusted Analysts

EPS )

Q2 EPS -$0.31

Q2 53.2%

Adjusted

Gross

Margin

Analyst Coverage

* The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

* The average consensus recommendation for the semiconductors peer group is "buy"

* Wall Street's median 12-month price target for Semtech Corp ( SMTC ) is $57.00, about 10.4% above its August 22 closing price of $51.09

* The stock recently traded at 27 times the next 12-month earnings vs. a P/E of 17 three months ago

Press Release:

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)