Semtech Corp. beat Wall Street estimates on earnings and revenue in the fiscal second quarter, which pleased analysts who follow the company. The Camarillo semiconductor developer and manufacturer reported last month an adjusted earnings per share of 38 cents and revenue of $137 million for the quarter ending July 28. Analysts on average expected earnings of 36 cents and revenue of $135 million, according to Zacks Investment Research. Shares closed at $47.31 on Sept. 11. Still, the sales the company had were less than in the same period a year earlier when it had $163 million in revenue. Some analysts and company management said this reflected the ban on Chinese telecom giant Huawei Technologies Co. Ltd. doing business with U.S. companies. Semtech Chief Executive Mohan Maheswaran said in a conference call with analysts to discuss the quarter that demand for its proximity-sensing components decreased due to lower Chinese smartphone demand driven by the ban. “While our Huawei smartphone business will continue to be a challenge, we believe our proximity-sensing business will benefit from increasingly stringent global (specific absorption rate) regulations as governments recognize the health risks associated with increasingly powerful 5G radios,” Maheswaran said during the call. “Over the next few years, we expect the majority of smartphones and wearable devices to have soft sensors included in their system designs.” Hamed Khorsand, an analyst with BWS Financial Inc. in Woodland Hills, said the issue for Semtech is that it has not seen much of a recovery from its Chinese customers. “(Semtech) trying to offset the weakness in China is creating a longer timeframe for quarterly revenue returning to last year’s level,” Khorsand said in a research note. “The diversified product portfolio along with growth in some of its products should lead to earnings power coming back over the next couple of quarters.” The growth areas for the company during the second quarter were led by its long-range, low-power technology, also known by LoRa, and the data center sub-segments. The industrial end market, which includes LoRa, made up about 36 percent of Semtech’s total revenue during the quarter. “In Q2, our LoRa enabled business grew nicely,” Maheswaran said during the conference call. “The momentum and interest in LoRa is very strong, and we are seeing more and more (Internet-of-Things) use cases emerge every day.” Some recent wins for Semtech’s LoRa include use in smart water metering products for a Chinese water company; in the kitchen and refrigerators of a five-star restaurant in Dubai; and in a new enterprise-grade statewide network in Tasmania. Tore Svanberg, an analyst with Stifel Financial Corp. in St. Louis, said in a research note that Semtech’s LoRa technology is compelling with strong growth potential over the long term. “New use cases continue to expand, especially in high-volume smart homes/enterprise applications, as well as Cloud Micro-Service/geolocation (with management estimating a potential $100 million opportunity within the next five years),” Svanberg said in the report. Khorsand is bullish on LoRa and has been following the technology’s success as it became the standard used by 120 network operators. “(Semtech) is forecasting it could have over 500,000 gateways on the market by the end of their current fiscal year,” Khorsand wrote in his report. “The expansion is in part due to the low cost of deploying the technology.” The company anticipates having 130 network operators using LoRa by the end of its fiscal year. Additionally, in that same time frame it expects to have LoRa networks in 90 countries, up from the 82 where they are currently deployed. In the call with analysts, Maheswaran said that there was great interest in Semtech’s announced cloud-based LoRa services, which include geolocation services. Early in the year, the company began beta testing geolocation with limited partners and in the following months more users were expected to integrate the new service into their platforms. “We believe that customers will begin transitioning from testing our geolocation services to qualification and commercialization early next year,” Maheswaran said. “Based on our anticipated growth in LoRa sensors and the assured attach rates of sensor geolocation, asset tracking and other services, we expect our LoRa Cloud services to grow to $100 million in recurring revenues within the next five years.”