Synaptics Shares Down 6% On Weak Outlook, But Q1 Results Top Estimates

(RTTNews) - Shares of Synaptics, Inc. (SYNA) drop six percent in extended trade on Thursday after the human interface solutions company provided revenue guidance for the second quarter, below Street view.

However, the company reported a profit for the third quarter that soared from last year, reflecting improved margins and strong double-digit revenue growth amid greater strength in mobile revenue. Both adjusted earnings per share and quarterly revenues also topped analysts' expectations.

"In addition to posting substantial revenue growth during the fiscal first quarter, we made strong progress on a number of fronts," President and CEO Rick Bergman said in a statement.

The Santa Clara, California-based company reported net income of $34.94 million or $1.00 per share for the first quarter, sharply higher than $6.05 million or $0.18 per share in the prior year quarter.

Excluding items, adjusted net income for the quarter was $45.91 million or $1.31 per share, compared to $12.74 million or $0.37 per share in the year-ago quarter.

On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $1.23 per share for the quarter. Analysts' estimate typically excludes special items.

Net revenue for the quarter soared 75 percent to $222.61 million from $127.04 million in the same quarter, and topped thirteen Wall Street analysts' consensus estimate of $219.09 million by a whisker.

Revenue from mobile products, including all touchscreen and video display products, soared 152 percent year-over-year to $162.7 million, representing 73 percent of total revenues.

Meanwhile, PC product revenues for the quarter declined 4 percent to $59.9 million from a year ago, representing 27 percent of total revenues.

"We saw a growing number of devices deploy our on-cell and in-cell display integrated solutions, continued to gain traction in the China mobile market, and broadened our customer base in large touchscreens through key new design wins in tablets and touch-enabled notebooks," Bergman added.

Gross margin expanded 140 basis points to 49.1 percent from last year's 47.7 percent. Earlier in the month, the company announced its entry into the fast growing fingerprint ID market through a proposed deal to acquire Validity Sensors. The deal is expected to reinforce the company's market leadership in human interface technology while significantly expanding its market opportunity.

Looking ahead to the second quarter, the company expects revenues in a range of $192.0 million to $208.0 million. Street is looking for quarterly revenues of $209.35 million.

Looking ahead, Bergman said, "Following a strong first quarter, the first half of the fiscal year is tracking according to plan, and we expect to post top-line growth in excess of 50% over the same period last year."

SYNA closed Thursday's regular trading session at $53.04, up $0.62 or 1.18% on a volume of 1.50 million shares. However, the stock plunged $3.07 or 5.79% in after hours trading.