SAN JOSE, Calif. -- Atmel Corp. has quietly sold its WiMax development group in Germany as part of an ongoing effort to restructure the company, according to reports from analysts.
The reports did not identify the buyer for the group, but they did indicate that the company's restructuring efforts are far from over.
It begs some simple questions: What's next? Is the worse over for the company? And what is Atmel in the first place?
It's somewhat hard to grasp the company's strategy. In recent times, Atmel has experienced a management coup, fab closures and various product divestments.
The latest move? ''Atmel sold the WiMax team based in Germany, which should help reduce operating expenses,'' said Edwin Mok, an analyst with Needham & Co. LLC, in a report. ''We believe Atmel may decide to sell other product groups with slower growth or weaker margins.''
''Management made further progress realigning operations by announcing that it sold its WiMAX development team, completing the sale of its fab in North Tyneside, and actively pursuing the sale of its fab in Heilbron, Germany,'' said Craig Berger, an analyst with FBR, in a report.
''Atmel is a restructuring story, as management works to enrich its mix of high-margin microcontrollers, reduce exposure to expensive fab sites, and rationalize product development toward its best opportunities,'' Berger said.
On Wednesday, San Jose-based Atmel said revenues for the first quarter of 2008 were $411.2 million, a 3.4 percent decrease compared to $425.6 million for the fourth quarter of 2007 and a 5.1 percent increase compared to $391.3 million for the first quarter ended March 31, 2007.
Net income for the first quarter of 2008 totaled $6.8 million or $0.02 per diluted share. This compares to net income of $1.7 million or $0.00 per diluted share for the fourth quarter of 2007 and net income of $28.9 million or $0.06 per diluted share for the year-ago quarter.
Microcontroller revenue grew 8 percent sequentially in Q1. Nonvolatile memory revenues fell 9 percent quarter- over-quarter.
''Atmel's RF/automotive revenues grew 4 percent sequentially. Qualcomm is and has been shifting its transmitter/receiver BiCMOS foundry business away from Atmel, toward another foundry,'' Berger said in a report. ''ASIC revenue fell 13 percent quarter-over- quarter, primarily due to seasonality in its SmartCard business.''
It was not all doom-and-gloom. ''Atmel reported better-than-expected 1Q results and gave better-than-expected 2Q guidance,'' he said. Consistent with business seasonality and general market trends, the company anticipates second quarter 2008 revenues will be up 0-to-3 percent on a sequential basis.
