* Posts better-than-expected third-quarter results
* Forecasts highest annual sales growth since 2007
* Strong demand for fingerprint ID helps sales
* Could have 80 pct market share in fingerprint ID
* Shares rise 14 pct to touch life-high in after-hours trade
(Adds analyst comments, background, updates shares)
By Lehar Maan
April 24 The growing popularity of using
fingerprints to unlock mobile phones and other devices is
expected to drive growth at Synaptics Inc, which makes
the chips enabling the technology popularized by Apple Inc's
Synaptics' chips for fingerprint ID and touchscreens are
used in Samsung Electronics Co Ltd's Galaxy S5, and
strong sales of the smartphone will help Synaptics post its
strongest annual revenue growth since 2007.
The chipmaker's shares soared as much as 14 percent to
$72.75 in after-hours trading, after touching their all-time
high of $67.71 in regular trading on Thursday.
Synaptics could boast of a market share of as much as 80
percent in fingerprint recognition technology for the next few
quarters as the S5 will be the dominant smartphone being shipped
with the technology, Feltl & Co analyst Jeffrey Schreiner said.
The company entered the fingerprint ID market through the
acquisition of Validity Sensors Inc last October, with which it
also got its entry into Samsung's phones. It was not clear if
Synaptics also supplies to Apple.
Schreiner said Synaptics market share in the fingerprint ID
market could fall with the launch of Apple's new phone, rumored
to be in September, and other smartphones.
However, Stifel Nicolaus and Co analyst Kevin Cassidy
expects Validity to be Synaptics' catalyst for growth next year.
"They have got 45 percent market share in touch control in
handsets and we think they could get that kind of market share
For now, strong demand for touchscreen devices in general
helped Synaptics post better-than-expected results for the
third-quarter ended March 31 and forecast a strong finish to the
Synaptics' forecast revenue growth of 37-40 percent for the
year ending June 30. Revenue growth was last better in 2007,
when it clocked a 44.6 percent rise.
Charges related to the acquisition of Validity Sensors
pushed the company to a net loss of $40.1 million, or $1.12 per
share, in the third quarter ended March 31.
However, Synaptics said the deal added to non-GAAP earnings
a quarter ahead of schedule. Its non-GAAP, or adjusted, profit
of 63 cents per share was well ahead of analysts' average
estimate of 57 cents per share.
Revenue rose a better-than-expected 25 percent to $204.3
million, as business from mobile phone clients rose 44 percent.
Synaptics forecast fourth-quarter adjusted earnings of
$1.10-$1.32 per share on revenue of $275-$295 million.
Analysts on average were expecting profit of 98 cents on
revenue of $231.3 million, according to Thomson Reuters I/B/E/S.
The company's stock has risen 71 percent in the past 52
weeks, outperforming the broader S&P 500 semiconductors index
(Additional reporting By Sruthi Ramakrishnan and Supantha
Mukherjee in Bangalore; Editing by Savio D'Souza)