Weak Outlook from ANADIGICS
by Zacks Equity ResearchFebruary 23, 2012 | Comments : 0 Recommended this article: (0)
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Wireless segment generated revenues of 82% of total revenues in the fourth quarter and Broadband generated the remaining 18%.
Wireless revenues came in at $29.9 million in the fourth quarter, up 7.3% sequentially driven by continued momentum from prior designs wins at top wireless customers – Samsung, Huawei, and ZTE. However, wireless invoicing began slowing late in the quarter, as observed by others in our industry.
Broadband segment generated revenues of $6.6 million in the fourth quarter, down 29.7% sequentially as business was restrained by the economy, lower home building and partly impacted by slight constraints from the Thailand flood.
ANADIGICS continues to see strong interest from OEMs, leveraging worldwide 3G and 4G deployments for applications beyond the traditional smartphone and tablet.
The company had four customers who generated more than 10% of total revenue – Samsung, LTE, Research in Motion, and Hauwei.
Gross margin came in at 16.5%, down from 20% in the previous quarter due to revenue mix.
Operating expenses of $15.7 million were up slightly from $15.5 million in the third quarter. Research and Development spending was up sequentially 6%, to $10 million as the company continued to introduce new product offerings, such as MMPA and PADs, as well as advanced-generation dual- and single-band discretes.
The company reported a loss of $0.23 in the fourth quarter compared to a net income of $0.05 per share in the year-ago quarter due to a decline in gross margin on the less favorable revenue mix.
Excluding one-time charges but including stock-based compensation expense, net income came in at $0.16 per share, in line with the Zacks Consensus Estimate.
ANADIGICS ended the quarter with cash and equivalents of $32.7 million, down from $97.1 million at the end of the 2010.
For 2011, ANADIGICS generated revenues of $152.8 million down 29.5% from a year-ago. Gross margin came in at 21.8%. The customers who generated more than 10% of total revenues were Research in Motion, Samsung, and VTE.
Going forward, ANADIGICS expects seasonality to impact results in the first quarter. Revenue is projected to decline as products sold to former top customers will reach end of life. The weak outlook prompted an 8.45% decline in share price to $2.71. ANADIGICS continues to face challenges in an uncertain economic environment and there is no respite from weakening demand in the near-term.
Hence, we continue to maintain a Neutral recommendation on ANADIGICS. Our recommendation is supported by Zacks #3 Rank, which translates into a short-term rating of Hold.
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