Supertex: LED Only "Bright" Spot

Supertex, Inc.: LED Driving Q1 Revenue Growth

Shares of Supertex Inc. (SUPX - Snapshot Report, Hold) are tracking lower in a weak session today following its release of fiscal Q4 and year-end results yesterday. Q4 revenues of $15 million were light compared to our and consensus estimates of $16.1 million and $15.6 million, respectively. Non-GAAP EPS of $0.12 was also lower compared to our estimate of $0.15 and consensus of $0.17. Earnings were negatively impacted by lower gross margin of 42% resulting from weak overhead absorption and lower fab utilization.

LED backlighting for LCD televisions was the only "bright" spot in the quarter, and appears to be the driver for Q1 revenues. Sales of medical electronics products, imaging products and industrial electronics products declined sequentially during the reported quarter. Medical electronics product sales performed relatively well in Asia and imaging products, which consist of EL inverter products and commercial printer products, were lower due to reduced overall demand. Revenues from high voltage ICs for industrial and other markets were also lower due to the global economic decline.

The company did not provide any specific guidance for Q1:FY2010, but indicated that sales in Q1 are expected to be "modestly higher" sequentially. LED backlighting for LCD televisions is the only area that the company appears to have some visibility in Q1, which is again expected to be the revenue driver as the company anticipates LED TVs going into volume production in the current quarter. SUPX reduced inventory by $1.7 million in the reported quarter and reduced expenses by $2.8 million by implementing cost-cutting measures in manufacturing and operating activities.