Irvine chipmaker Microsemi Corp. seems to be back in Wall Street’s good graces after two tough quarters.
A few weeks ago the company, which makes chips for aerospace and other industrial users, reported lower quarterly sales and profits in line with Wall Street’s modest expectations and offered more of the same in its outlook for the current quarter.
But stability is welcome these days, according to some analysts.
“It seems likely that Microsemi’s recent storm clouds have now passed overhead and that investors have seen the re-emergence of ‘Steady Eddy,'” said Craig Berger, an analyst at FBR Capital Markets & Co. in New York. “Stepping back, we think Microsemi is working its way back into recovery.”
Microsemi had sales of $105.7 million for the March quarter, down 17% from a year earlier and off 19% from the December quarter.
Analysts on average were expecting $107 million in sales for the quarter.
The company earned $15 million before charges, better than the $14.2 million analysts had expected. Microsemi’s profits were down 40% from a year earlier.
Including charges, Microsemi lost $9.5 million.
Analysts like Microsemi during downturns, because it sees slow and steady business from the government, military and other big players in the aerospace and medical industries.
Of course, this also means it sees lower growth than other chipmakers during boom times.
Analyst Berger upped his earnings estimates for the balance of the year.
He’s now expecting Microsemi to see 2009 profits of $73 million, up from a previous outlook of $63 million.
He also increased his price target to $20 per share, up from $16.
Microsemi was trading at around $13 per share last week on a recent market value of about $1 billion.
EPS Looking to Buy
Costa Mesa-based startup EPS Corp., which makes software that helps companies cut down on energy costs, landed a $30 million round of venture funding.
EPS raised about $20 million in an initial round, for a total of $50 million raised to date.
Denver-based Altira Group LLC led the round. It also included prior investors Ngen Partners, a Santa Barbara private equity group focused on green technology, and Robeco NV, the investment arm of the Netherlands’ Rabobank Group.
The company,started by a group of former Enron Corp. employees,works with manufacturers, small companies and big corporations to cut energy costs by installing equipment, outsourcing operations and securing government rebates.
The money is set to be used to fund acquisitions and expand EPS’ software, which provides companies with data about energy use and carbon dioxide emissions.
The company’s software measures usage of electricity, heating gas, water and wastewater output and tracks the weather.
“You have to measure to manage,” Zoellner said. “The idea is to make all that information visible and do it across a portfolio of sites.”
Locally, it has worked with the Buena Park operations of Dallas-based Dean Foods Co. to make its milk and ice cream warehouses more efficient.
Last year, EPS bought three power plants used by Dean Foods in City of Industry and Massachusetts for undisclosed terms. The purchase includes a 10-year, $100 million deal to provide energy to Dean Foods.
The plants conserve energy by taking wasted heat and turning it into steam and hot water.
At Irvine-based Royalty Carpet Mills Inc., EPS took excess heat from the carpet maker’s piston engines and put it to use boiling water and drying carpet.
EPS had 2008 sales of $25 million and has been doubling sales every year since its 2001 start, according to Zoellner.
The company is on track to see $50 million in sales this year, he said.
Expanding Bags
Two local technology heavyweights are expanding their lineup of private label laptop bags and computer accessories for consumers.
Santa Ana’s Ingram Micro Inc., the biggest distributor of technology products, earlier this year tapped Anaheim’s Targus Inc., which makes laptop bags, backpacks and accessories, to make a special lineup of carrying cases for its in-house private label brand, called V7.
“V7 by Targus” laptop bags, cases and backpacks are sold through Ingram Micro’s network of resellers, which distribute to stores, schools and others.
The initial product lineup includes a higher-end, top-loading carrying case, two backpacks, a messenger bag and a slip case, which protect laptops carried within another bag.
The companies recently announced they are set to roll out three versions of the top-loading case, including a premium case designed for business travelers, a standard case and a value case designed from smaller-sized laptops.
It’s also added a deluxe backpack, a standard messenger case and two slipcases.
“We are pleased with the response from our reseller and small and medium-sized business customers,” said Kevin Prewett, Ingram Micro’s vice president of vendor management for North America. “These latest products offer more choices for customers.”
Privately held Targus is the biggest maker of laptop cases by market share,the company has roughly 65% of the market.
Ingram started out with V7 products for businesses, including mice, keyboards, flat-panel monitors and ink for printers. It’s sold V7 gear in Europe for more than a decade.
A few years ago, the company expanded to include consumer electronics, spurred by demand for gadgets such as portable navigation devices, notebook computer cases, digital picture frames, notebook batteries and cables.
