Lattice Semiconductor net income up 14.3 percent in Q4, beats Wall Street predictions 

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Lattice Semiconductor outperforms Wall Street’s Q3 earnings forecast.
Image: Lattice Semiconductor

Lattice Semiconductor ended 2020 on a strong note, improving its fourth-quarter net income by 14.3 percent annually. The firm also beat Wall Street’s predictions on revenue and profit for the holiday quarter.

Its robust performance is due to its new product introductions and skillful pricing and cost management.

The chipmaker anticipates continued growth of its business in the first quarter of 2021 based on demand for its core offerings. In addition, it believes it can properly support its customers despite the global electronic component shortage.

Lattice’s Impressive Q4 Earnings

Lattice made $107.1 million in the December ending period with net income of $15.9 million and adjusted earnings per share (EPS) of $0.19. By comparison, it recorded sales of $100.2 million, profit of $13.9 million, and EPS of $0.17 in Q4 2019. Its strong showing topped market analysts’ gross and net income projections by 3.97 and 10.5 percent, respectively.

The fabless manufacturer earnings also exceeded the high point of the quarterly earnings guidance it offered last October.

CEO Jim Anderson said the corporation outpaced its intake projections because of its appealing catalog and successful strategy execution.

In 2020, it launched two new Nexus brand FPGAs on schedule, which were received positively by its clients. Those deployments helped it grow its core communications and computing business last period by 20 percent year-over-year. The firm bettered its automotive and industrial financial results, with both segments expanding by 16 percent annually.

Anderson also noted Lattice improved its income in Q4 by following through on a cost reduction and pricing optimization program it initiated three years ago.

Lattice Predicts Continued Growth in 2021 Despite Supply Bottleneck

For Q1 2021, the manufacturer anticipates generating between $106 million and $114 million in revenue. Based on its prior-year results, the company forecasts its business will expand by 2.91 to 10.67 percent.

The corporation believes strong demand for its communications and computing products will drive its growth in the current quarter. Its data indicates customer interest in its server and digital calculation lineup will not diminish in the near-term. It expects the increasing popularity of 5G will drive sales of its fifth-generation network infrastructure gear.

Lattice also projects its auto and industrial businesses will drive its expansion in the long-term. In an earnings call, Anderson fielded a question about the semiconductor shortage’s impact on its operations. He acknowledged the industrywide negative effects of the component shortfall but said the firm is in a “good position.”

The chief executive explained the chipmaker began to build inventory in Q2 2020 strategically. He noted it continued to stockpile high running parts with no obsolescence risk through the second half of last year. As a result, it has the internal inventory necessary to support its client’s orders going forward.

Because of the chip sector’s interconnected nature, no provider is immune to the shortage’s effects. However, Lattice’s forward-thinking product management suggests it will endure the current crisis without sustaining much damage. Barring unforeseen complications, it should perform very well in 2021 thanks to its leadership’s foresight.

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