Shares of Conexant Systems Jump 12% on First Trading Day

Conexant Systems Inc., the Newport Beach-based communications semiconductor business recently spun off by Rockwell International Corp., saw its stock jump 12% in its first day of trading on Wall Street.

In brisk trading, Conexant shares rose $2.06 from their issue price last week, closing at $18.81 on Nasdaq.

Rockwell’s stock price, adjusted for the spinoff, rose 94 cents to close at $41.13 a share in light trading.

“We’ve seen a lot of interest in Conexant, particularly among investors who are looking for a turnaround story or a long-term semiconductor story,” said Daniel Myers, senior semiconductor analyst with Lehman Bros.

Earlier in the day, Conexant executives reiterated predictions that the company will return to profitability by the close of its fiscal year in September.

Despite recent heavy losses--Conexant reported a loss of $262 million on revenue of $1.2 billion for fiscal 1998--industry watchers say the firm has a promising future. Analysts expect the company to post losses for the first three quarters of 1999 and report a profit of 2 cents a share for the fourth quarter.

Conexant left Rockwell debt-free on Dec. 11 with a $350-million bank credit line in place, Chief Executive Dwight Decker said. About 45% of Conexant’s revenue this year will come from modem chip sales, he said, and by 2001, 75% of it will come from its emerging network and wireless businesses.

Bloomberg News was used in compiling this report.