Microsemi Corporation’s MSCC second-quarter fiscal 2016 adjusted earnings of 53 cents per share surpassed the Zacks Consensus Estimate by 3 cents.Microsemi Corporation (MSCC) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompanyRevenuesMicrosemi reported revenues of $444.3 million, up 35.0% sequentially and 50.0% year over year, driven by strong growth across all the end markets.However, revenues were slightly below the Zacks Consensus Estimate of $445 million.MarginsPro-forma gross margin was 60.9%, up 387 basis points (bps) sequentially and 379 bps year over year. The increase was driven by higher revenues, a favorable product mix, operational efficiency and consolidations.Adjusted operating expenses of $179.0 million increased 51.6% sequentially and 70.0% year over year. Operating margin of 20.7% was down 54 bps sequentially and 95 bps year over year.Net IncomeMicrosemi generated GAAP net loss of $212.0 million or loss of $1.93 per share in the reported quarter. The company had reported net income of $23.7 million or earnings of 25 cents per share in the previous quarter and $24.9 million or earnings of 26 cents per share a year ago.Excluding special items but including stock-based compensation expense, non-GAAP earnings per share were53 cents against 58 cents in the prior quarter and 55 cents in second-quarter fiscal 2015.Balance SheetCash and cash equivalents at the end of the fiscal second quarter was $153.1 million, down from $199.7 million in the fiscal first quarter. Operating cash flow was $5.4 million compared with $82.9 million in the previous quarter. Capex was $12.5 million against $10.5 million in the previous quarter.Inventories were $235.1 million compared with $231.4 million in the previous quarter. Accounts receivable were$211.9 million against $176.2 million at the end of the prior quarter.GuidanceMicrosemi expects third-quarter fiscal 2016 revenues of $420–$440 million, while the Zacks Consensus Estimate is pegged at $461 million. Non-GAAP earnings per share are likely to be within 69–75 cents, above our estimate of 59cents.Our TakeMicrosemi reported a decent quarter with the top line exceeding the Zacks Consensus Estimate but the bottom line missing the same.The company’s focus on improving product mix, operational efficiency and consolidation, will drive revenues and help it achieve the 60% gross margin target in the second half of calendar 2016.In Dec 2015, Microsemi completed the acquisition of PMC-Sierra and the integration remains well on track. Moreover, the company’s recent divestiture of its non-strategic component of systems and packaging business to Mercury Systems, Inc. is expected to close on May 2.During the quarter, the company also announced the sale of its Broadband Wireless Division, which was previously part of PMC-Sierra, Inc. to Max-Linear.These initiatives are part of Microsemi's plan to divest its non-core businesses to refocus on core areas like Internet of Things and automotive markets, adding to its expertise in timing and synchronization, weapons and contraband screening systems, power supply, and Ethernet and broadband infrastructure. Also, both these deals will free up capital for the development of higher-value ICs and system-on-chip offerings, makingthe business model more profitable.Zacks Rank &Stocks to ConsiderMicrosemi carriesa Zacks Rank #3 (Hold). Investors may consider stocks such as Advanced Micro Devices AMD, GigPeak, Inc. GIG and Broadcom Limited AVGO, each of which carries a Zacks Rank #2 (Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BROADCOM LTD (AVGO): Free Stock Analysis Report ADV MICRO DEV (AMD): Free Stock Analysis Report MICROSEMI CORP (MSCC): Free Stock Analysis Report GIGPEAK INC (GIG): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research