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Microsemi rises on better-than-expected 3Q results

Shares in chip maker Microsemi Corp. rose sharply Friday after the company said that it reversed a third-quarter loss, earning more than analysts had expected, and boosted revenue.
/ Source: The Associated Press

Shares in chip maker Microsemi Corp. rose sharply Friday after the company said that it reversed a third-quarter loss, earning more than analysts had expected, and boosted revenue.

THE SPARK: The Irvine, Calif., company reported third-quarter net income of $6.6 million, or 8 cents per share, which exceeded analysts' expectations, and reversed a loss of $31.3 million, or 39 cents per share, from a year ago. The company said that had it not been for restructuring charges, its earnings per share would have been 35 cents.

The company's revenue also rose 38 percent year-over-year to $115.2 million from $109.7 million.

THE BIG PICTURE: Analysts believe the company is on track to continue delivering strong performance, particularly as it builds partnerships with companies in the defense industry.

THE ANALYSIS: Jefferies & Co. Inc. on Friday raised its price target on Microsemi's shares to $20 from $17, and said Microsemi is poised to deliver steady results, thanks to its reliable business in the defense sector. Microsemi has a leading market share in the defense category, and also has the benefit of high barriers to entry, Jefferies & Co. said.

SHARE ACTION: Up $1.48, or 7.1 percent, to $22.31 in afternoon trading.