SILC Q2 08 Results
SILC – Silicom Limited (NASDAQ) – (Closing Price – $5.82)
Silicom Limited reported Q2 results on July 28 and reported very disappointing results.
The company reported revenue of 5.17 million and diluted EPS of 0.05. Revenue was down 22% year over year and down 33% from the prior quarter. EPS was also down substantially from 0.25 last year and 0.26 in the prior quarter.
The weak quarter was blamed on the decline in the shekel/dollar exchange rate, the difficult market environment, and a significant reduction in orders from Silicom’s largest customer.
The CEO did voice some optimism by stating that one customer intends to make Silicom’s BYPASS cards a standard rather than an optional feature and that discussions have nearly concluded with several new accounts.
The stock price took a big dive after earnings were announced but has currently found support. Silicom’s stock price is trading below book value so I don’t see much, if any, downside left.
I think a lot of the weakness with tech stocks in general is cautious spending by companies due to the uncertain economic climate. I think economic conditions will start to improve in the coming quarters so I think it would be unwise to sell Silicom at the current price. I am going to recommend to continue to hold.
Disclaimer: I currently own shares in SILC.
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Is it too late to get in the stock now that it has gone up 10% + this week? Thanks in advance for the feedback.
No, I don’t think so.