Atmel Offer Keeps It Strong – Analyst Blog
Source: http://www.zacks.com/stock/news/15207/Atmel+Offer+Keeps+It+Strong+-+Analyst+BlogPosted on Monday, October 13th, 2008 | In Stocks to Watch
Atmel Corporation (ATML) is expected to release its Q3:FY08 results on Oct. 29. Earlier, the company reported Q2:FY08 revenues of $420.9 million, up 4.1% y/y and up 2.4% q/q. Microcontrollers posted record revenues of $143 million and the ASIC segment posted revenues of $121 million.
Recently, Microchip, Inc. (MCHP) and ON Semiconductor (ONNN) announced an unsolicited offer to acquire ATML for $5/share in cash. The offer represents a 52.4% premium to Oct. 2 closing price, and values ATML at $2.3 billion. The deal is led by MCHP, with ONNN acquiring the NVM and RF/Auto businesses.
MCHP plans to sell Atmel’s ASIC business together with the French fab to a third party. Going forward, management expects revenues to be down 3% 7% in Q3:FY08, due to onetime revenue adjustment. Excluding these adjustments, Q3 organic revenue guidance is for up 1% to 4% sequentially. We had earlier upgraded ATML to a Hold and have adjusted our target price to $5.00, reflecting the current cash offer price by MCHP.
While focusing at improving its cost structure, Atmel must struggle with ASP erosion in key product markets and face the challenges of manufacturing new products on advanced technologies. Aside from such ASP erosion and cyclical market risks, a key concern is Qualcomm’s (QCOM) plans to move away from Atmel’s Bi-CMOS process to RF-CMOS.
Read the full analyst report on ATML
Read the full analyst report on MCHP
Read the full analyst report on ONNN
Read the full analyst report on QCOM
“ATML” Free Stock Analysis: Buy? Sell? Hold?
“ONNN” Free Stock Analysis: Buy? Sell? Hold?
“MCHP” Free Stock Analysis: Buy? Sell? Hold?
“QCOM” Free Stock Analysis: Buy? Sell? Hold?
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