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UPDATE 2-Lattice Semiconductor raises Q1 rev view, shares rise
March 3, 2010 / 11:59 AM / 8 years ago

UPDATE 2-Lattice Semiconductor raises Q1 rev view, shares rise

* Sees Q1 rev up 21 pct-25 pct sequentially

* Sees Q1 gross margins 55 pct-57 pct

* Shares up as much as 13 pct

(Adds analysts’ comments, background, share movement)

By Manasi Phadke

BANGALORE, March 3 (Reuters) - Chipmaker Lattice Semiconductor Corp (LSCC.O) raised its first-quarter revenue outlook, citing robust growth across all product lines and continued strength in order bookings.

Shares of the Hillsboro, Oregon-based company rose as much as 13 percent to $3.47, their highest in 20 months, Wednesday morning to be one of the highest percentage gainers on Nasdaq.

“The new revenue guidance is impressive and highlights both design wins for Lattice along with a significantly stretched semiconductor supply chain now starting to catch up with end demand,” Robert W. Baird analyst Tristan Gerra wrote in a note.

Gerra, who has a “neutral” rating on the stock, said this would be the highest quarter-over-quarter change Lattice has seen in 10 years.

“While strength could continue near-term, most of the good news is out, in our view, while risks of a significant slowdown in the second half are now significant,” he added.

However Northland Securities analyst Richard Shannon expects the company’s second half of the year to be as strong as its first.

“The company is having a lot of success in wireless in China with customers such as Huawei Technologies HWT.UL and ZTE Corp (0763.HK),” said Shannon, who rates the stock “outperform.”

Lattice has recently secured a couple of design wins for its chips in flat panel displays with a large Japanese original equipment manufacturer, he said.

The company, which designs programmable chips for markets such as consumer, computing, industrial and communications, competes with rivals like Altera Corp ALTR.O and Xilinx Corp (XLNX.O).

“Lattice is likely to gain some share this year from Altera and Xilinx,” Shannon said.

Latice now expects first-quarter revenue to increase by 21 percent to 25 percent sequentially, based on its fourth-quarter revenue of $55.1 million.

It had previously forecast first-quarter revenue to rise 8 percent to 12 percent on a sequential basis.

Analysts expect revenue of $60.5 million, according to Thomson Reuters I/B/E/S.

The company returned to profitability in the fourth quarter, benefitting from strength in Asia, recovery in its Japan business, and improvement in its U.S. markets, after posting losses for three years.

Earlier this week, cellphone chipmaker Skyworks Solutions Inc (SWKS.O) raised its second-quarter outlook, citing strong demand for mobile Internet, smart grid and high-growth analog applications. [ID:nSGE6200EE]

Lattice said it now expects gross margins of 55 percent to 57 percent, modestly up from its previous outlook of 54 percent to 56 percent.

The company expects to incur operating expenses of $30 million, compared with its prior outlook of $29 million, due to higher sales related expenditure and acceleration of certain research and development activities.

Reporting by Manasi Phadke in Bangalore; Editing by Aradhana Aravindan, Jarshad Kakkrakandy

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