PMC-Sierra Beats on Both Top and Bottom Lines

PMC-Sierra (Nasdaq: PMCS  ) reported earnings on Jan. 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 29 (Q4), PMC-Sierra beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank significantly and GAAP earnings per share dropped significantly.

Gross margins increased, operating margins dropped, net margins contracted.

Revenue details
PMC-Sierra logged revenue of $129.4 million. The nine analysts polled by S&P Capital IQ hoped for a top line of $126.5 million on the same basis. GAAP reported sales were 15% lower than the prior-year quarter's $152.6 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.12. The 10 earnings estimates compiled by S&P Capital IQ anticipated $0.10 per share. GAAP EPS of $0.05 for Q4 were 58% lower than the prior-year quarter's $0.12 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 71.7%, 310 basis points better than the prior-year quarter. Operating margin was 4.6%, 440 basis points worse than the prior-year quarter. Net margin was 8.6%, 1,000 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $124.3 million. On the bottom line, the average EPS estimate is $0.08.

Next year's average estimate for revenue is $538.5 million. The average EPS estimate is $0.40.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 212 members out of 231 rating the stock outperform, and 19 members rating it underperform. Among 48 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 45 give PMC-Sierra a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on PMC-Sierra is hold, with an average price target of $5.75.

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