ANADIGICS, Inc. (ANAD - Analyst Report) recently announced that the company is shipping production volumes of various versions of fourth generation power amplifiers to ZTE for its smartphones. The smartphones include the V889D, V788D, N788, N910, and PF200 smartphones.
ANADIGICS expects to be continually involved with ZTE as the latter develops innovative smartphones for the global wireless market. The customer ZTE comprised more than 10% of revenue in the first quarter of 2012.
In the long term, ANADIGICS expects business to thrive based on three key factors: continued and accelerated growth in the established markets for 3G, 4G and CATV and Wireless infrastructure products, increasing penetration of newer-generation wireless and wireline broadband communications technology into developing markets, such as China and India worldwide, and an increased demand for solutions within the latest-generation products in these end markets.
Meanwhile, earnings estimates have declined severely after the company reported a wider loss in the first quarter of 2012.
ANADIGICS reported a loss of $15.8 million or 23 cents per diluted share compared with a net loss of $10.7 million or 16 cents per diluted share in the year-ago quarter. Excluding one-time charges but including stock-based compensation expense, net loss came in at 24 cents per share, wider than the Zacks Consensus Estimate of a loss of 21 cents per share.
ANADIGICS continues to face challenges in an uncertain economic environment and there is no respite from weakening demand in the near term. The company expects a drop in revenue in the second quarter due to a final step down in sales to one of its former customer, Research in Motion .
We continue to maintain a Neutral recommendation on ANADIGICS in the long run. However, the near-term weakness forces us to have a Zacks #4 Rank, which translates into a short-term rating of Sell.