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IDT 4Q16 results +6

17:31 02-May-16

Current quarter guidance is for revenue of $191M +/-5M, which translates to 36 cents per share.  The revenue figure is slightly light, but essentially in-line, the EPS figure beats estimates by about 5%.  The second calendar half should be even better as OpEx declines in the second half.

I see nothing but good in the call.  IDT products are gaining market share across a wide array of products, including the automotive and industrial products acquired with ZMDI.  This diversification is very valuable, as is the management's very reliable, conservative reporting and guidance.  The Data Center segment was the lone laggard but is stabilizing and should return to growth in the second half.  Even if that were not to happen, say because Intel's Broadwell platform was delayed, management projects that the impact to the bottom line would be minimal due the expanded diversified product line.

Looking to the future, management is encouraged by "overwhelming" customer response to new products and expects to out-pace the broader market.  Wireless charging growth seems more a matter of when than if.  Another growth area is new sensor products which will be introduced the next two quarters.  These should include very differentiated optical, remote thermal, gas sensors.  Again, the optical and thermal sensors seem to dovetail very nicely with Intel's road map, though I'm never willing to count on M&A theories for an investment thesis.

Fortunately there is no need to so.  IDT has $2.80 per share of net current assets on the balance sheet.  After subtracting this out and applying a conservative hybrid PE of 15 yields a current fair value of $24.40.  Given the company's product pipeline, a higher PE would be quite reasonable going forward, especially as new sorts of architectures and products are introduced to end markets.  The makes last quarter's buybacks, which reduced overall share count by 10%, at average price of $18.50 look that much better! 

IDTI graduates to dedicated overage, with it's own section on the website.

Integrated Device Technology has reported financial results for the fiscal fourth quarter of 2016:

• EPS of 36 cents, beats by 3 cents
  
• on in $189 revenue, beats by $2M
  

The results look good so far.  With a strong accomplishments for the quarter and product pipeline still to come, the stock has deservedly recovered to prior levels in after hours trading.  Good guidance should produce further gains.  More after the conference call. 

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