(By Salman - iStockAnalyst Writer)Synaptics Inc. (NASDAQ:
SYNA), a leading developer of human interface solutions for mobile computing, communications, and entertainment devices, is scheduled to report financial results for the first quarter of fiscal 2010 on Thursday, October 22, 2009, after the close of market. Analysts, on average, currently expect the company to report earnings of 42 cents a share on revenue of $116.39 million. In the year ago quarter, the company reported earnings of 39 cents per share on revenue of $115.86 million.
Synaptics creates interface solutions for a variety of devices including notebook PCs, PC peripherals, digital music players, and mobile phones. Synaptics has two business segments, Personal Computer and Digital Lifestyle Products. Since going public seven years ago, Synaptics has grown from 100 million to $473 million in revenue, representing compounded annual growth of 25%.
Late in July, the Santa Clara, California-based company reported quarterly results that beat analyst estimates. Fiscal fourth-quarter net income jumped to $13.1 million or $0.36 per share, compared to net income of $2.6 million or $0.07 per share in the comparable quarter last year. Excluding one-time items, the company earned 47 cents a share in the latest period. Quarterly revenue for the quarter was $115.3 million, up 19% from $96.9 million in the prior-year quarter. Analysts, on average, expected the company to earn $0.44 per share on revenue of $112.11 million.
Gross margin as a percentage of net revenue was 40.5%, or $191.5 million, for the year ended June 30, 2009 compared with 40.8%, or $147.5 million, for the year ended June 30, 2008.At the end of the quarter SYNA was sitting on $192 million in cash and had a backlog of $62.8 million in orders. Synaptics expects to report first-quarter sales in a range of $113 million to $119 million. The company expects to see growth from its mobile phone applications while sales from PC companies will decline due to lower prices of touchpads and a falloff in revenue from multimedia control applications. Synaptics anticipates revenue in the range of 495 million to $525 million for fiscal 2010 with the first half roughly flat year-over-year.
The company has been investing heavily in value engineering and material science, working with its partners to aggressively take costs out of capacitive Touchscreen in order to bring prices down and to fuel mass market adoption.
Last month, technology research firm Gartner said that mobile PC shipments "have regained substantial momentum, especially in emerging markets," while the slide in desktop PCs is slowing. For 2010, Gartner sees units up 12.6%, on momentum in mobile PCs and a return to growth in desktop PCs. Global annual shipments of smartphone handsets are projected to increase from nearly 200 million in 2009 to 450 million in 2013, according to market research firm iSuppli.
On Tuesday, Jefferies analyst Blayne Curti downgraded Synaptics shares to "Underperform" from "Hold", citing increasing competition in handsets and a shift to lower-priced products in the PC market. Curtis said it looks as if orders for the current quarter are below what the company is expecting. In a research note to clients, he wrote that the company is facing growing market share loss and increased competition at customers such as LG, HTC and Research In Motion Ltd. He said further that product delays at Nokia Corp. (NYSE: NOK) and Research In Motion (NASDAQ: RIMM), as well as inventory issues at LG, its largest customer, may hurt the company.
In terms of stock performance, Synaptics shares are up almost 24% since the beginning of the year. Shares of the company rose 11 cents or 0.52% to $21.14 in afternoon trade on Wednesday.
Disclosure: Author doesn't own any of the stocks discussed here.
