Conexant’s 1st Quarter Buoyed by Holiday Sales

Hailing a turnaround in all its businesses, communications chip maker Conexant Systems Inc. on Wednesday reported higher than expected sales for its fiscal first quarter, boosted by brisk holiday sales of cellular telephones, personal computers and Xbox game systems.

The Newport Beach company posted sales of $229.5 million, 44% below the $410.4 million in revenue for last year’s first quarter but 14% higher than fourth-quarter sales. In the past few months, the company twice increased its sales estimates for the quarter.

But Conexant, which has announced plans to spin of two units, posted a net loss of $204.5 million, or 80 cents a share, for the quarter ended Dec. 28, wider than the loss of $199.6 million, or 85 cents a sahre, for last year’s first three months.

The company, which fired nearly 2,000 workers last year to reduce costs, said it will pare an additional 150 to 200 workers this quarter from its work force of 6,900.

Analysts, nevertheless, were upbeat after Conexant forecast flat to slightly higher revenue for the current three-month period, a quarter in which industry sales typically drop about 10%.

“Conexant may be one of few chip makers with revenue improvement in the March quarter,” said analyst F. Drake Johnstone of Davenport & Co. in Richmond, Va.

The stock lost 14 cents to close at $12.58 a share on Nasdaq before results were released. In after-hours trading, the stock went as high as $13.95 a share.

Conexant Chairman Dwight W. Decker predicted that the company will turn a profit in the calendar year.

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