Atmel shares jump on Broadpoint.AmTech analyst upgrade; restructuring seen driving profits

Atmel shares jump on analyst upgrade

SAN FRANCISCO — Shares of Atmel Corp. jumped Tuesday after the chip maker’s stock was upgraded on signs the company’s restructuring is going well.

Analyst Doug Freedman with Broadpoint.AmTech upgraded the stock to “buy” from “neutral.” He said the sale of a chip factory and the planned sale of other company assets could allow the company to boost earnings by around 40 cents per share as early as fiscal year 2011.

Atmel is massively overhauling its business to focus on its core business lines. One part of that strategy is relying less on chips it makes itself, and more on chips Atmel designs but are manufactured by third parties. Chip making can require hundreds of millions of dollars in investments in cutting-edge factories.

Freedman said he has some long-term concerns about the company’s ability to improve its profit margins.

Atmel shares rose 36 cents, or 7.7 percent, to $5.03.