The Hayward, Calif.-based device maker posted profits of $3.8 million, or 5¢ per diluted share, on sales of $43.2 million during the 3 months ended June 30. That compares with losses of $26.3 million, or 43¢ per share, on sales of $37.3 million during the same period last year.
Adjusted for 1-time expenses, the company reported earnings of 2¢ per share, blowing away the expectations of analysts, who had projected a 3¢-loss for the quarter. Nonetheless, news of the CEO change and uncertainty about the future scared Wall Street away in a flurry.
Stephen Fanning stepped down from his role as company president, CEO and board member, according to a press statement, to be replaced in the interim by current board chairman Mark Sieczkarek. A search for a new chief is underway.
The company also lowered its full-year guidance to $165 million in revenue, compared to its previous estimate of $180 million. Adjusted earnings are now expected to be approximately $10 million for the full year, compared to previous estimates at $13-16 million.
"While Q2/13 was mixed, a CEO change and lowered guidance for 2013 sets up for a tumultuous six months," analysts at Canaccord Genuity wrote, lowering their guidance from a "hold" to a "buy" rating. "Given uncertainty surrounding the new CEO’s strategy, we believe it wise to recommend investors wait until more clarity before adding to or taking new positions."
SLTM shares closed at $2.25 on Thursday, August 8, down 16.7% from the pre-earnings value of $2.70 on the morning of Monday, August 5. Shares had lost another few points by midday Friday, trading at $2.21 as of about 1:20 p.m.