Conexant Shows Quarterly Loss
Riding high on demand of its wireless and networking chips, Conexant Systems Inc. on Wednesday reported sharply higher revenue for its fiscal second quarter.
But because of charges tied to a series of key acquisitions it made this year, the Newport Beach company posted a net loss of $132 million, or 64 cents a share, for the period ended March 31.
These results included merger-related and write-off charges of 87 cents per share. The charges covered purchases of Maker Communications, Microcosm and the broadband wireless unit of Oak Technology.
Excluding those acquisition charges, the company’s quarterly net income would have been $47 million, or 21 cents per share, compared with $8.9 million, or 5 cents a share, a year earlier.
Analysts had forecast an average of 19 cents per share, according to First Call/Thomson Financial.
“It was a tough quarter to really find fault with,” said Warburg Dillon Read analyst Greg Mischou.
Revenue for the quarter jumped to $501.7 million, up 58% from the year-earlier quarter’s $317 million. Revenue was down slightly from the seasonally stronger first quarter ended in December, but by far less than analysts expected.
“Stronger than anticipated demand in several of our fastest-growing segments contributed to our outstanding second-quarter results,” said Dwight Decker, Conexant chairman and chief executive.
Shares of Conexant moved slightly on Wednesday, up 31 cents to close at $57.25. The company’s financial results were released after the market closed. In after-hours trading, shares seesawed between $61 and just below $57.
Conexant said it expected revenue to grow in the range of 6% to 8% in the June quarter and gross margins to remain at 46%. It said operating profit would grow at greater than 10% sequentially.
For the full fiscal year, the company said it expected $100 million in unforeseen revenue, or $2.1 billion.
Based on current new product design wins and orders on the horizon, Conexant said its mature PC modem business would grow modestly. The 60% of its overall revenue that comes from new business areas, such as wireless, is expected to grow about 10%.
Going forward, Decker pointed to digital cellular power amplifiers, high-speed network devices and digital satellite cable TV converters as strong growth areas.
