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TriQuint Corporation (TQNT - Analyst Report) recently reported results for the first quarter of 2012, which were roughly in-line with expectations but the outlook for the second quarter was disappointing. Revenues of $216.7 million in the first quarter of 2012 were down 5% sequentially and down 3% year over year.

Net income plummeted 56% sequentially and 85% year over year $1.9 million. EPS came in at $0.01 compared to ($0.06) in the year-ago quarter and $0.03 per share in the previous quarter. Excluding restructuring charges but including stock-based compensation, earnings per share came in at $0.01, in-line with the Zacks Consensus Estimate.

In terms of end markets, Mobile Devices accounted for 68% of total revenues, Networks accounted for 22% of total revenues while Defense and Aerospace accounted for the remaining 10%.           

Revenues from Mobile Devices (the largest of the three major markets that the company serves – Mobile Devices, Networks, and Defense and Aerospace) were down 8%.  Defense and Aerospace were down 4%. Nevertheless, network infrastructure posted a sequential decline of 10%.

The book-to-bill ratio was 0.89, primarily due to weakness in Mobile Devices which partially offset strength in Networks.

Gross margin (excludes stock-based compensation charges and certain charges associated with acquisitions) was 30.4% for the quarter, down from 31.0% in the previous quarter and in-line with management’s guidance. This was attributable due to improved product and business mix which partially offset increased costs associated with placing the new 6-inch gas line in production in Texas.

TriQuint ended the quarter with cash and investments of $146.0 million, up from $116.3 million at the end of the previous quarter. The increase was mainly due to improvements in accounts receivable, reduced capital expenditures and the sale of an equity investment for $7 million. Day sales outstanding decreased to 44 days due to strong collections and a linear shipment pattern.

Inventory declined $6.1 million to $145.5 million and turns improved to $4.2 million.

Going forward, TriQuint expects revenues between $170 million and $185 million in the second quarter of 2012. Gross margin is projected between 27% and 31% driven by weak factory utilization. Operating expenses are estimated around $70 million, including $11.0 million of litigation expense. EPS is forecasted around $0.10 and $0.15.

Although the company reported results in-line with expectations, the guidance provided by the company was weak. This led to significant decline in stock price after the results were reported.

The company has been posting weak results for the last few quarters. Hence, we have a Zacks #5 Rank on the stock, which translates into a short-term rating of strong sell. Nevertheless, we maintain a Neutral recommendation on the stock in the long-run.

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