EXAR: Turnaround Continues

Good morning!  Today’s highlighted stock is in the semiconductor industry, which as a whole seems to have hit an inflection point back in November and has had some nice momentum to the upside since.

Exar Corporation (NASDAQ - EXAR - $9.59) announced financial results for fiscal 3Q13 yesterday after the close and the news was strong.  EPS of $0.09 per share beat the $0.07 estimate.  Additionally, gross margin increased to 45.8% and some of the cost cutting measures implemented came to fruition as free cash flow for the period was $3.6 million, up $1.8 million from 2Q13.  The Company also raised guidance for 3Q14 to $31 million.

Exar has a wide variety of product offerings in the high performance analog and mixed-signal integrated circuits and sub-systems for data and telecommunications, networking and storage, industrial control, and consumer applications.  The company was founded in 1971 and is headquartered in Fremont, CA.  Exar is charging ahead with new products as two have been introduced recently.  The XRP2524, designed for UBS 3.0, is a power distribution product that provides fault detection with higher data transfer speeds and increased power to peripheral devices.  The SP3221 is a low power, single driver, single receiver transceiver product for portable or battery powered products like data logging and acquisition devices, remote sensors, medical diagnostics, and other embedded systems.  The SP3221E has the proprietary AUTO ON-LINE® that automatically ‘wakes up’ from shut-down state when a peripheral device is turned on and connected.

The stock broke out yesterday and it looks like there is more daylight ahead. 

Have a great day!

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Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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