CAMARILLO, Calif. (AFX) - Chip maker Semtech Corp. said Tuesday its fiscal second-quarter sales grew 12 percent, but the company did not post the rest of its quarterly results because it is restating past finances due to errors in accounting for stock options compensation.
Semtech said its sales for the quarter ended July 30 were $64.9 million, compared with $58 million in the year-ago period. Analysts, on average, were expecting higher sales of $66.7 million, according to a poll by Thomson Financial.
'Demand during the quarter reflected seasonal weakness in the computing and handheld end-markets, which is typical of the second quarter,' said Mohan Maheswaran, president and chief executive, in a statement.
Maheswaran added that the company expects third-quarter sales to be about flat to down 2 percent from the second quarter. Analysts are looking for sales of $69.5 million, which is 7 percent higher than the second quarter's revenue.
Semtech has been conducting a previously disclosed internal review of its stock options practices, having received a federal grand jury subpoena and an informal Securities and Exchange Commission inquiry relating to the matter.
On July 20, the company said it found that the accounting measurement dates for certain grants are different from the measurement dates that were used for the grants.
As a result, the company said it expects to record additional, material stock compensation expenses and now has to restate its finances for the years between 2002 and 2006.
Dozens of other companies are under federal inquiry for possibly backdating their stock options grants, in which the exercise price of stock options are manipulated by retroactively dating stock option grants to coincide with share price lows, thus boosting the payout when the stock is sold.
Backdating can be legal but it must be disclosed to investors and accounted for properly because it can violate federal tax and accounting laws in some cases.
Shares fell 3 cents to $12.64 in after-hours trading, having earlier closed down 7 cents at $12.67 on the Nasdaq.
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