| Tech Stock News and Analysis |
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| Wednesday, December 13, 2006 |
Shares of integrated circuit maker Atmel Corp. soared in Wednesday trading after the company announced a reorganization plan that is expected to result in tens of millions in annual savings by 2008.
As part of the plan, the company said Tuesday it plans to sell two European plants and cut 10 percent of its non-manufacturing work force.
The plan is expected to result in annual savings of $70 million to $80 million in 2007, and between $80 million and $95 million by 2008.
Wedbush Morgan Securities analyst Craig Berger said the move could add 5 cents to 7 cents per share in annual earnings per share savings, and he suggested the stock is undervalued.
"We maintain a 'Buy' rating on Atmel because the stock is a restructuring play with further realignment opportunities to pursue in 2007 and 2008; and because Atmel is transitioning into a microcontroller firm with higher margins," Berger wrote in a note to investors. He has an $8 target price on the shares.
Shares of Atmel rose 61 cents, or 11.6 percent, at $5.89 in midday trading on the Nasdaq. |
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