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TriQuint Incurs Loss in 1Q

Zacks Equity Research

TriQuint Semiconductor Inc, (TQNT), a leader in RF (radio frequency) solutions and technology innovator, posted a net loss of $27.9 million or 17 cents per share in the first quarter of 2013 versus a net income of $1.9 million or 1 cent in the year-ago quarter. Non-GAAP loss stood at $27.2 million or 17 cents per share in the reported quarter versus a net income of $4.1 million or 2 cents per share in the prior-year quarter. The adjusted loss for the reported quarter was in line with Zacks Consensus Estimate

GAAP revenues were $184.2 million in the first quarter 2013, down 15% year over year. The quarterly sales missed the Zacks Consensus Estimate of $199 million. On an end-market basis, revenues in the Mobile device market declined 30%, Network revenues increased 2% while Defense revenues were down 16% sequentially.

Gross profit was $38.8 million versus $62.6 million in the prior-year period. Gross margin was 21.0% versus 28.9% in the year-ago period .The decrease in margin was driven by lower revenues and approximately $5 million in charges from a resolved quality issue.

Operating expenses for the first quarter of 2013 were $73.3 million versus $66.2 million in the year-ago quarter, largely driven by higher R&D spending.

During the reported quarter, TriQuint received the 2013 Compound Semiconductor Industry Award for breakthrough performance in GaN thermal management. Additionally, the company launched 5 new Transimpedance Amplifiers for Optical market.  The company launched premium TC-SAW and BAW filters to support 4G and Wi-Fi coexistence, which are designed to meet the toughest filtering challenges.

As of Mar, 30, 2013, cash and cash equivalents were relatively steady at $120.7 million versus $116.7 million at year-end 2012.

Going forward, TriQuint expects revenues to be in the range of $185 million to $190 million in second quarter 2013, with non-GAAP gross margin in the range of 27% - 29%, driven by higher factory utilization. Non-GAAP net loss per share is expected to be between 10 cents and 12 cents.

TriQuint is expanding its capacity for high-performance filters as it anticipates a strong demand in the second half of 2013 and beyond. This is likely to improve its performance in the coming quarters. The company is well positioned in each of its markets to recover growth and build on its margin momentum.

TriQuint currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth considering now are Syntel, Inc (SYNT), Lionbridge Technologies Inc. (LIOX) and Virtusa Corp (VRTU), each carrying a Zacks Rank #2 (Buy).


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