Microsemi Corporation (MSCC) has approved a share repurchase authorization of up to $100 million. Microsemi expects this program to be complete before Sep 30, 2016.
The number of shares to be repurchased and the timing will depend on the prevailing market conditions and other corporate considerations. Microsemi plans to use the available working capital to fund the current share repurchase authorization.
The strength of Microsemi’s business model reflects its commitment toward returning value to shareholders using strong cash generation capabilities. We believe that the continued share buybacks will increase investors’ enthusiasm regarding the shares, while retaining its strong financial position.
Microsemi’s strong balance sheet and cash flows provide financial flexibility for share repurchases and accretive acquisitions. During the last concluded quarter, cash and cash equivalents were $183.3 million, down $21.9 million from previous quarter. The company generated cash from operations of $54.4 million and free cash flow of $46.4 million.
Microsemi Corporation is an original equipment manufacturer of a broad range of high-reliability and analog/mixed signal integrated circuits. The company’s fiscal third-quarter revenues were up 1.8% sequentially and 20.5% from the year-ago period to $292.3 million. However, earnings of 46 cents missed the Zacks Consensus Estimate by a penny due to higher-than-expected operating expenses.
Microsemi continues to undertake various initiatives and develop products, keeping in mind the interest of the organization over both the long and short run. The new share repurchase program indicates that the company is confident about its steady cash flows.
Additionally, Microsemi recently announced its decision to purchase Centellax, a California-based provider of high-speed semiconductor products. The acquisition will allow the company to better serve its customers by leveraging Centellax’s optical capabilities and its Ethernet data center offerings.
Microsemi holds a Zacks Rank #2 (Buy). Other stocks that investors can consider include Analog Devices (ADI), Fairchild Semiconductor International Inc (FCS) and Microchip Technology Inc. (MCHP). All these stocks carry a Zacks Rank #2.
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