26 July 2012

TriQuint enters loss in Q2 as Mobile Devices demand falls 24%

For second-quarter 2012, RF front-end component maker and foundry services provider TriQuint Semiconductor Inc of Hillsboro, OR, USA has reported revenue of $178m, down 22% on $228.8m a year ago and down 18% on $216.7m in Q1/2012 (exceeding the 5% decline that quarter).

By market sector, Mobile Devices revenue was $112.3m (63% of total revenue), down 24% on $148.5m in Q1 (68% of total revenue) and down 30% on $159.9m a year ago (70% of total revenue). TriQuint's largest customer (accounting for over a third of sales) is Foxconn Technology Group (Apple’s Taiwan-based manufacturing partner). Apple uses TriQuint chips in both the iPhone and a version of the iPad, but has reported a quarter of lower-than-expected sales of the stop-gap iPhone 4S as buyers await the delayed launch of the new iPhone 5 model this fall.

Networks revenue was $44.9m, down 5% on $47.4m in Q1 and 2% on $45.8m a year ago. Nevertheless, due to declining less than Mobile Devices, Networks has risen from 20% of total revenue a year ago to 22% in Q1 and 25% in Q2.

Defense revenue was $20.8m (12% of total revenue), level with Q1 but down 10% on $23.1m a year ago (10% of total revenue).

“Mobile devices demand was soft in the second quarter as the smartphone industry prepares for a seasonally strong second half,” says president & CEO Ralph Quinsey. Even although 2G revenue more than halved (from $9.3m in Q1 to $4.3m in Q2), 3G/4G uncharacteristically fell as a proportion of Mobile Devices revenue (from 80% in Q1 to 77.4% in Q2), partly due to Connectivity revenue rising slightly.

Of Networks revenue, Radio Access has fallen from 39% share in Q1 to 25% in Q2, while Transport has risen from 44% to 59%, with Multi-Market falling only slightly from 17% to 16%.

“Our Defense and Networks revenue was slightly up year-to-date with a healthy outlook for the remainder of the year,” Quinsey adds.

On a non-GAAP basis, gross margin was 27.9%, down from 30.4% last quarter and 41.4% a year ago, partly as TriQuint’s manufacturing capacity constraints continued to limit its ability to capitalize on the increasing demand for smartphones. Operating expenses were $64.3m (operating margin of 36% of revenue), up from $61.4m last quarter.

Compared with net income of $4.1m ($0.02 per diluted share) last quarter and $28.9m ($0.17 per share) a year ago, TriQuint has reported its first quarterly net loss since early 2009. However, the loss of $15m, or $0.09 per share, was better than the expected $0.10-0.15. This was partly because litigation expenses (related to anti-trust and IP claims against Avago regarding BAW filters) actually fell from $3.9m to $3.7m (rather than the expected rise to $11m) due to settling the dispute prior to trial.

During the quarter, cash and investments fell by $32.5m to $162.4m, but this was due mainly to a stock repurchase of nearly 4.9 million shares for about $25m.

During Q2/2012, TriQuint started shipping multi-mode power amplifier (MMPA) module and bulk acoustic wave (BAW) filter content for a new Samsung Galaxy phone (operating via Verizon), and launched what is claimed to be the industry's first 802.11ac Wi-Fi RF module for next-generation smartphones and tablets. The firm also closed major design wins for fiber-to-the-home (FTTH) and optical networks.

In addition, TriQuint booked $13m in orders for the F-35 Lightning II Joint Strike Fighter and TPQ-53 Army radar, and announced a contract from the US Defense Advanced Research Projects Agency (DARPA) to lead a $12.3m development program focused on ultra-fast gallium nitride (GaN) switch technology for the Microscale Power Conversion (MPC) program.

“TriQuint is well positioned for revenue growth and improved financial performance in the second half of 2012,” believes Quinsey.

For third-quarter 2012, TriQuint expects revenue of $195-205m (up about 12% on Q2, though still down 5% year-on-year). Non-GAAP gross margin should be 30-32%. Net income per share is expected to recover to roughly breakeven.  

See related items:

TriQuint’s revenue drops 5% in Q1 as demand from Apple contractor Foxconn wanes

TriQuint’s quarterly revenue rises more-than-expected 5%

TriQuint’s revenue falls 6% in Q3

TriQuint’s Q2 and Q3 revenue hit by product focus

Tags: TriQuint

Visit: www.triquint.com