News

22 October 2010

 

Hittite exceeds revenue, margin and profit forecast in Q3

For third-quarter 2010, Hittite Microwave Corp of Chelmsford, MA, USA, which designs and supplies analog and mixed-signal RF, microwave and millimeter-wave ICs, modules and subsystems, has reported record revenue of $64.2m, up 54.7% on $41.5m a year ago and 6.4% on $60.3m last quarter (and just above the forecast $62–64m). Growth is attributed to improvements in Hittite’s principal markets, increased market penetration, and new product launches.

Fiscal	Q4/2009	Q1/2010	Q2/2010	Q3/2010
Revenue	$43.7m	$54.2m	$60.3m	$64.2m

About 43.8% of revenue came from the USA ($28.1m, up 2.3% on last quarter, driven by the military market) and 56.2% from outside the USA ($36.1m, up 10%, driven partly by cellular communications). This compares with Q2’s 45.6%:54.4% ($27.5m from the USA and $32.8m from outside the USA).

Gross margin of 74.6% is up from 72% a year ago but down slightly from 74.8% last quarter. Operating expenses have continued to rise from $11.6m a year ago, but by only 1.6% from $15.4m last quarter to $15.7m. Nevertheless, operating income has continued to rise from $18.3m (44.1% of revenue) a year ago and $29.7m (49.2% of revenue) last quarter to $32.2m (50.2% of revenue). Net income has also risen, from $12m a year ago and $19.2m last quarter to $20.8m. This is above the forecast of $19.1–19.8m (which assumed gross margin of just 72–73% and operating expenses up as much as 5–6% from last quarter).

“We achieved new records in revenue, operating profit, margins and net income,” notes VP & chief financial officer Bill Boecke.

Capital expenditure was $2.1m (making $6.6m year-to-date), focused on facility, test equipment and software for engineering, and production masks and other production assets. During the quarter, total cash and cash equivalents rose by $31.2m to $273m.

At a macro level, the increasing demand for additional wireless data bandwidth and network capacity has been driving growth. “Our strategy is to expand our product portfolio to capitalize on this trend and to take market share,” says chairman & CEO Stephen Daly.

During the quarter, Hittite’s engineering teams launched 30 new products (making 85 year-to-date), bringing the standard product portfolio to more than 880. “These 30 new non-commodity products will allow us to capture more market share in the cellular infrastructure, fiber optic, microwave & millimeter-wave communications and military markets,” reckons Daly.

For fourth-quarter 2010, Hittite expects revenue of $64.5–66.5m (up 3.6% sequentially and 52% year-on-year revenue; the goal for full-year 2010 growth is 50%). Net income should be $20.2–21m, despite operating expenses rising sequentially by 4–5% due mainly to expansion activities. As it completes the expansion into its new engineering facility (bought in Q1), Hittite expects capital expenditure to rise to about $5m, but it should return to the $2m level thereafter, says Boecke.

See related items:

Hittite grows 52% year-on-year to $60.3m in Q2

Hittite’s quarterly growth accelerates to 24%

Hittite revenue grows a more-than-expected 5.3% in Q4/09

Hittite recovery continues, driven by new products

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