Actel Corp (ACTL)

Actel Corporation designs, develops and markets field programmable gate arrays (FPGAs) and programmable system chips (PSCs) and supporting products and services. The company's products line which consists of mixed-signal Actel Fusion PSCs based on Flash technology, reprogrammable FPGAs based on Flash technology, one-time programmable FPGAs based on antifuse technology, and high-reliability (HiRel) FPGAs are used by manufacturers of automotive, communications, computer, consumer, industrial, military and aerospace, and other electronic systems.

The company reported growth of 10% year-over-year, but a sequential decline of 1% in the revenue for the fourth quarter of 2006. Additionally the total backlog of the company at the beginning of first quarter of 2007 was also lower than the first quarter of 2006 as well as the fourth quarter of same fiscal. The company is launching new products like the Fusion to enter into the telecom sector and the IGLOO our low-power Flash FPGA family. The success of these products is also uncertain and even if the company is able to reap out some revenue out of these products it is expected to be in a very long-term future. Although the management is positive about the success of these products but it has also stated that system manager type of design like Fusion won’t be particularly fast to turn into sales. Inline with this thinking the management is also taking a conservative approach while giving the guidance for the first quarter of 2007.

Looking at the performance of the company and the intense competition in the industry it is expected that the company will not be able to live up to the investor’s expectations and is likely to under perform in the coming future.