Conexant Systems profit soars despite sales drop

Conexant Systems 4th-qtr profit soars despite sales drop due to cost cuts, business sale

• On 8:16 pm EDT, Thursday October 29, 2009

NEWPORT BEACH, Calif. (AP) -- Chip maker Conexant Systems Inc. said its fiscal fourth-quarter profit soared as cost cuts and the sale of a business offset a drop in sales.

Conexant also issued a first-quarter outlook above Wall Street's expectations, sending shares soaring 25 percent in after-hours trading. The stock closed the regular session up 31 cents, or 14.5 percent, at $2.44.

The company earned $23.5 million, or 47 cents per share, compared with $917,000, or 2 cents per share, a year earlier. Conexant sold its broadband access product lines to Ikanos Communications Inc. for $54 million during the quarter.

Excluding one-time items, the company said it earned 7 cents per share in the most recent quarter. Analysts polled by Thomson Reuters expected a profit of a penny per share.

Revenue fell to $56.2 million from $81.1 million in the fiscal fourth quarter of 2008. The company said its imaging and audio businesses grew 18 percent from the third quarter and accounted for 58 percent of total revenue.

For the full fiscal year, the company reported a loss of $5.26 million, or 11 cents per share, compared with a loss of $300.2 million, or $6.05 per share, in fiscal 2008. Revenue dropped to $208.4 million, from $331.5 million in 2008.

In the first quarter of fiscal 2010, the company expects earnings excluding items of 11 cents per share on $60 million in sales, compared with analysts' average profit estimate of 9 cents per share.

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