Summary Business: Electronic components Headquarters: Newbury Park CEO: John D. Poe Market Cap: $2.5 billion Dividend Yield: N/A Total Liabilities: $424.8 million P/E: 51.7 Long-Term Debt: $397.3 million *Semtech Corp. does not pay dividends Newbury Park-based semiconductor and chipmaker Semtech Corp. figured to take another financial beating when its preliminary second-quarter numbers came out last month. But when it beat analysts’ earnings expectations by 1 cent per share, Semtech officials felt they were on to something, thanks largely to an increase in orders during the second half of the quarter. “During these difficult market conditions, Semtech has benefited from a diverse product offering and a balanced mix of end markets,” said Jack Poe, company chairman and CEO, after the company announced it thinks it will beat analysts’ earnings estimates in the quarter ending July 29. Analysts polled by Thomson Financial/First Call had projected earnings of 7 cents a share on estimated revenue of $39 million. The new numbers gave the company’s stock a 17-percent boost, jumping $3.33 to $33.53 a share the day they were released, Aug. 22. Semtech closed at $36.71 on Sept. 10, the last day of trading before the markets closed because of the World Trade Center disaster. Its 52-week high is $58.50, its 52-week low $15. According to its preliminary figures, the company earned $6.1 million in net income on revenue of $40.5 million in the second quarter, compared to $13.7 million in net income on revenue of $60.6 million in the same quarter last year. Although earnings and sales are well below last year, Semtech’s Poe said a pick-up in business during the second half of the quarter gives him reason for optimism in the third quarter. Semtech estimates sales for the third quarter will range somewhere between $41.7 million and $42.6 million, with projected earnings of 8 to 9 cents per share. Louis Gerhardy, an equity analyst with Morgan Stanley Dean Witter in San Francisco, predicted the company will top $42.5 million in sales in the third quarter, with earnings of 9 cents a share and a $40 target stock price by year’s end. “The seasonal uptake of the PC market should benefit them and should drive sales,” said Gerhardy, noting that the company makes many of the chips and semiconductors used in PCs, laptop computers and other devices in the telecommunications field. The company reported increased sales for its products used in notebook computers, personal digital assistants, mobile telephones and computer gaming systems. Semtech also makes computer chips, power supplies, computer keyboard encoders and related electronic components. The company’s revenue has declined in the past year due to fewer orders resulting from large customer inventories and the downturn in the PC and telecom markets, Gerhardy said. Semtech, however, responded by cutting back its workforce through the sale of its silicon wafer-making facility in Santa Clara in March and replacing its production by using manufacturing subcontractors. Joseph Osha, a Merrill Lynch equities analyst, said the worst of the tech downturn is over and semiconductor firms like Semtech should see a recovery within six to 12 months. Previously high inventory levels among tech customers are declining, resulting in a slight increase in orders, he said. “Once we see reduced inventory, we can expect orders to return to normal,” Osha said. Among Semtech’s top customers are Compaq Computer Corp., IBM Corp., Honeywell International Inc. and Germany’s Siemens A.G. Both Gerhardy’s and Osha’s comments were made before last week’s World Trade Center disaster. Gerhardy said that because of Semtech’s large presence in the PC market, its recovery will likely depend on consumer interest, which appeared to be rebounding before last week’s events. “We expect semiconductors to stop declining in the September-to-October time frame, but we won’t expect growth in that area until the second quarter of next year,” Gerhardy said.