Synaptics Stumbles on Guidance (SYNA)

Synaptics Inc. (NASDAQ: SYNA) is not continuing its challenge of a year high after its earnings report.  Despite 9% revenue growth and a rise of 19% in non-GAAP earnings per share, the results are being taken as mixed because of guidance and cautious commentary.

The earnings came to $0.68 EPS versus estimates of $0.62 EPS, but that was non-GAAP and the GAAP earnings report was down at $0.51 per share. The company’s second quarter 2012 net revenues were $145.5 million, but that is down year over year from $159.6 million at a time that Thomson Reuters was calling for $145.38 million in revenues.

Cash flow from operations for the second quarter of fiscal 2012 was $29.2 million, and it ended the quarter with a cash balance of $282.5 million.   Synaptics blamed the revenue trends on a product transition in mobile and a continued soft PC market.

As far as guidance, Synaptics is pointing to estimates in the current quarter of $128 to $136 million and Thomson Reuters has targets of $138 million.  Unfortunately, all of the guidance phrases bleed more caution from the company:

• “Overall visibility remains limited amidst global macroeconomic concerns.” 
• “backlog of approximately $69.0 million”
• “We expect both PC and non-PC revenue to be down sequentially based on seasonal trends.” 

Shares closed up $0.08 at $34.34 against a 52-week range of $21.97 to $34.94 and the after-hours reaction is down about 3% at $33.31.  With slightly lower guidance and within 2% or so of a year high, shareholders are probably glad things are not worse after this report.

JON C. OGG