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| Wednesday, July 26, 2006 |
SigmaTel Shares Surge on Smaller-Than-Expected 2nd-Quarter Loss
-- Shares of audio chip maker SigmaTel Inc. were up sharply in Wednesday afternoon trading, a day after the company reported better-than-expected results for the second quarter.
Excluding a tax benefit and other expenses, the company reported a quarterly loss of $3.3 million, or 10 cents per share -- beating analyst expectations of a much wider loss of 51 cents per share. Revenue fell 37 percent to $43.8 million from $69.6 million a year ago, but still came in above the Wall Street's $42 million consensus estimate.
Shares of Sigmatel, which have traded between $3.45 and $21.58 over the last year, were up $1.12, or 29.1 percent, at $4.97 in afternoon trading on the Nasdaq. The stock traded as high as $5.38 earlier in the day.
While investors seemed to cheer the results, analysts weren't quite so bullish.
Jefferies & Co. analyst Adam Benjamin raised his price target to $4.50 from $4 on the news, citing better fundamentals and improved liquidity, but maintained a "Hold" rating on the stock.
"We remain neutral as we believe SigmaTel must reduce operating expenditure levels, regain lost MP3 share and ramp Oasis and Protocom," Benjamin wrote in a note.
Both Protocom and Oasis are semiconductor companies SigmaTel acquired over the last year.
American Technology Research analyst Shaw Wu, who has a "Sell" rating on the stock, was even more bearish.
"We remain concerned with SigmaTel's ability to continue as an ongoing concern if it does not reduce its high cash burn (rate)," Wu wrote in a note. |
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