Loss Narrows at ANADIGICS in 3Q
ANADIGICS, Inc. (ANAD) reported a loss of $17.0 million or 24 cents per diluted share in the third quarter of 2012 compared to a loss of $20.9 million or 30 cents per diluted share in the second quarter of 2012 and a loss of $10.0 million or 15 cents per diluted share in the year-ago quarter.
Excluding one-time items, loss came in at 23 cents per diluted share, narrower than the Zacks Consensus Estimate of a loss of 27 cents per share.
Revenues
ANADIGICS generated revenues of $28.6 million in the third quarter of 2012, down 23.1% year over year but up 14.1% sequentially as revenues from the new products ramp up offset declines in legacy products.
ANADIGICS reported Wireless revenues of $21.1 million in the third quarter, up 17.2% sequentially; driven by greater 3G content per device at top customers arising from increased Dual-band shipments along with growth at ProEficient and MMPA products.
Infrastructure (formerly Broadband) segment generated revenues of $7.5 million in the reported quarter, up 5.6% on a sequential basis, driven by CATV infrastructure. In this segment, $3.8 million of revenues came from CATV infrastructure; $1.1 million came from CATV subscriber. WiMAX generated revenues of $1 million and WiFi about $1.3 million.
The company had three customers who generated more than 10% of the total revenue namely, Samsung, ZTE, and Hauwei. Other customers in the quarter include Cisco (CSCO) and Sierra Wireless (SWIR) along with two distributors - Richardson and World Peace Group.
Margins
ANADIGICS reported a gross profit of negative $0.2 million in the quarter, compared to negative $2.5 million in the previous quarter, due to incremental contribution from the revenue increase and improved absorption of manufacturing costs. ANADIGICS continues to incur additional costs as the company introduces and deploys new technologies, processes and products.
Research and development expenses declined 3% sequentially. Selling and administrative expenses decreased 8% sequentially to $5 million as the company continues to undertake cost restructuring measures.
Balance Sheet
ANADIGICS ended the quarter with cash and equivalents of $10.3 million, down from $17.1 million at the end of the previous quarter.
During the quarter, ANADIGICS incurred $0.25 million in capital expenditures while capacity utilization was 45% during the quarter, versus 40% in the previous quarter.
Going forward, management did not provide any specific guidance for the coming quarter. ANADIGICS expects sequential growth in the coming quarter in its wireless segment as new products offset the decline in legacy business.
Samsung had selected ANADIGICS solutions for its flagship devices namely, Galaxy Note 2 and Galaxy S3.
ANADIGICS continues to focus on three market drivers that it believes will expand its served available market. These drivers include the rapid adoption of 3G and 4G data connectivity in wireless mobile devices, expansion of wireless and CATV infrastructure to support increase data use, and proliferation of high performance WiFi connectivity in mobile devices.
Management also expects gross margin to improve as revenues recover and the company completes the transition from legacy to new products.
Hence, we continue to maintain our long-term Neutral recommendation on ANADIGICS. Our recommendation is supported by a Zacks #3 Rank, which translates into a short-term Hold rating.
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