Intersil (ISIL) Posts In-Line Q4 Earnings, Beats on Revenues

Intersil Corp. ISIL reported fourth-quarter 2016 earnings per share of 16 cents, inline with the Zacks Consensus Estimate.

Over the past one year, shares of Intersil outperformed the Zacks categorized Semi General Industry. While the industry gained 48.06%, the stock returned 73.13%.

Revenues

Intersil reported revenues of $139.8 million, up 10.4% year over year and 0.5% sequentially. Quarterly revenues were above the Zacks Consensus Estimate of $136 million.

The increase was due to continued growth in the Consumer & Computing segment as well as double-digit growth in automotive.

Revenue for the full year was $542.1 million, up 4% from the year-ago quarter.

Revenues by End Market

Industrial &infrastructure comprised 64% of Intersil’s sales, down 1.3% sequentially but up 13.3% year over year. The year-over-year increase was due to strong demand for products in automotive, industrial and aerospace markets.

The Consumer & Computing segment generated the remaining 36% of sales, up 4.1% sequentially and 5.7% on a year-over-year basis.

Margins

Reported gross margin was 59.7%, up 210 basis points (bps) year over year but down 90 bps sequentially.

Operating expenses, including selling, general and administrative (SG&A) and research and development (R&D) expenses of $55.9 million, increased 5.9% from $52.8 million in the year-ago quarter. As a percentage of sales, both SG&A and R&D expenses decreased. As a result, reported operating margin came in at 16.3%, up 380 bps from the year-ago quarter margin of 12.5%.

GAAP net income was $19.1 million or earnings per share of 14 cents compared with $15.9 million or earnings of 11 cents in the prior quarter. Excluding special items but including stock-based compensation expenses, adjusted earnings per share were16 cents compared with 15 cents in the earlier quarter.

Balance Sheet

Intersil exited the fourth quarter with cash and short-term investments balance of $3.07 billion, up from $2.84 billion in the past quarter. Trade receivables were $54.3 million, down from $61.6 million in the previous quarter.

Cash flow from operations was $36.5 million compared with $23.3 million in the prior quarter. Capex was $3.0 million versus $1.8 million in the third quarter.

Guidance

The company will not provide any guidance for the first quarter of 2017 as it will soon be acquired by Renesas Electronics.

Intersil Corporation Price, Consensus and EPS Surprise

 

Intersil Corporation Price, Consensus and EPS Surprise | Intersil Corporation Quote

Conclusion

Intersil designs and manufactures high-performance analog, mixed-signal and power components, focused on power management applications. The company reported a decent quarter, with earnings matching the Zacks Consensus Estimate and revenues surpassing the same.

Last September, the company agreed to be acquired by Japan-based Renesas Electronics in a cash deal worth $3.2 billion. The transaction is expected to be closed in the first quarter of calendar year 2017, subject to approval by the relevant governmental authorities. The combined company will likely become a complete solution provider of embedded systems to customers.

Currently, Intersil has a Zacks Rank #3 (Hold). Stocks worth considering in the industry include Texas Instruments TXN and NVIDIA Corporation NVDA, both carrying a Zacks Rank #1 (Strong Buy) and Itron, Inc. ITRI carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Texas Instruments delivered a positive earnings surprise of 7.09%, on average, in the trailing four quarters.

NVIDIA Corporation delivered a positive earnings surprise of 24.93%, on average, in the trailing four quarters.

Itron, Inc. delivered a positive earnings surprise of 30.55%, on average, in the past four quarters.

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