Synaptics Q2 Profit Misses View, But Revenues Top; Guides Q3 Revenues In Line

(RTTNews) - Human interface solutions provider Synaptics, Inc. (SYNA) reported Thursday a profit for the second quarter that increased from last year, despite lower margins, reflecting strong double-digit revenue growth amid strength in in touchscreen and touchpad products. Adjusted earnings per share missed analysts' expectations, while quarterly revenues topped their estimates.

"Excluding the impact of the acquisition of Validity, which closed in early November, our financial performance for the December quarter was above the mid-point of our guidance as we experienced strong year-over-year revenue growth in touchscreen and touchpad products," President and CEO Rick Bergman said in a statement.

The Santa Clara, California-based company reported net income of $17.33 million or $0.48 per share for the second quarter, higher than $11.11 million or $0.33 per share in the prior year quarter.

Excluding items, adjusted net income for the quarter was $31.12 million or $0.86 per share, compared to $17.68 million or $0.53 per share in the year-ago quarter.

On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.88 per share for the quarter. Analysts' estimate typically excludes special items.

Net revenue for the quarter increased 44 percent to $205.76 million from $143.04 million in the same quarter, and topped twelve Wall Street analysts' consensus estimate of $201.74 million.

Revenue from mobile products, including all touchscreen, video display products and applicable fingerprint ID products, surged 64 percent year-over-year to $133.6 million, representing 65 percent of total revenues.

PC product revenues for the quarter grew 17 percent to $72.2 million from a year ago, representing 35 percent of total revenues.

The company in early November announced its entry into the fast growing fingerprint ID market after it acquired Validity Sensors, Inc. The deal will reinforce the company's market leadership in human interface technology while significantly expanding its market opportunity.

Gross margin contracted expanded 240 basis points to 45.9 percent from last year's 48.3 percent.

Looking ahead to the third quarter, the company expects revenues in a range of $180 million to $200.0 million. Street is looking for quarterly revenues of $184.03 million. This reflects backlog, customer forecasts, seasonality and incremental revenue from the new Fingerprint ID products.

Looking ahead, Bergman said, "As we enter the second half of fiscal 2014, we expect to benefit from continued strong organic growth, further augmented by growing contributions from our acquisitions and new product innovations."

Further, the company said it expects the new Fingerprint ID business acquisition to be accretive by the end of the fiscal year, earlier than previously anticipated.

SYNA closed Thursday's regular trading session at $56.81, up $0.15 or 0.26% on a volume of 2.43 million shares.