Despite encountering coronavirus pandemic related challenges, Lattice Semiconductor managed to improve its second-quarter net income by 24.2 percent from last year. The Hillsboro, Oregon-based firm’s financial results managed to surprise Wall Street with its latest earnings report. The company also offered guidance for the third quarter that indicates near-term stability.
Lattice Semiconductor Q2 Financial Results
In the period ending June 27, Lattice made $23.5 million in net income or adjusted earnings per share of $0.17. The company’s earnings outpaced Zacks Equity Research’s prediction by 13.33 percent. The brand also took in $100.589 million in revenue, which exceeded the group’s expectations by 0.26 percent. Though the firm fell short on sales compared to last year, it clobbered its 2019 quarterly profit by over $2.5 million.
Lattice also improved its gross margin and operating income despite increasing its research and development spending by 2.8 percent year-over-year.
CEO Jim Anderson attributed his company’s net income growth to an uptick in demand for its communications and computing components. The executive explained client device, server, and 5G purchases drove the segment’s sales up sequentially and annually. Anderson also noted Lattice adhered to its Q2 product release schedule in spite of headwinds generated by the global health crisis.
As Lattice reduced its inventory days from 140 in Q1 to 123 in Q3, the company seems to have exited the quarter with the wind at its back.
Health Forecast for Q3
The firm, which specializes in making programmable logic devices, offered a Q3 revenue range of $96 million and $106 million. As such, the brand anticipates a sales decline of 7 percent or an increase of 2.51 percent from Q3 2019. Zacks forecasts the company will make $99.27 million with earnings per share of $0.15 in the current period.
CFO Sherri Luther stated Lattice’s measured Q3 outlook reflects the firm’s ongoing concerns about the impact of the pandemic.
Nevertheless, the brand expects the deployment of fifth-generation mobile data networks will be a significant revenue driver in 2020. Anderson pointed out his company is supplying 30 percent more base station components with the current rollout than it did when facilitating the launch of 4G technology.
Research firm Frost & Sullivan recently published a forecast stating 5G component sales will soar to $15.03 billion by 2025. As that outlook specifies 180 percent market growth from 2019, it accords with Lattice’s guidance. Given its investment in developing forward-thinking network products, the semiconductor company should experience consistent growth through the next five years.