RF (radio frequency) solutions provider and technology innovator TriQuint Semiconductor Inc. (TQNT) reported net income of $13.6 million or 8 cents per share in the third quarter of 2013 compared to a net loss of $11.2 million or 7 cents in the year-ago quarter. The turnaround in earnings with a 221% year-over-year increase was attributable to strong mobile demand that led to improved factory utilization.
Excluding non-recurring items, non-GAAP earnings were $26.3 million or 16 cents per share in the reported quarter versus $2.5 million or 2 cents per share in the prior-year quarter. The adjusted quarterly earnings well exceeded the Zacks Consensus Estimate of 5 cents.
Revenues & Margins
Revenues for the reported quarter were $250.8 million, up 25% year over year with a strong performance across all markets. The quarterly revenues marginally beat the Zacks Consensus Estimate of $250 million.
On an end-market basis, revenues in the Mobile Devices market improved 43% year over year driven by a healthy demand for new LTE (Long Term Evolution) products and a significant product ramp in the quarter. While Network revenues increased 4% year over year, Defense and Infrastructure and Defense revenues were up 28% and 12% respectively.
Gross profit (GAAP) was $92.2 million versus $61.6 million in the prior-year period. Gross margin was 36.8% vis-à-vis 30.7% in the year-ago period. The increase in margin was driven by higher revenues, higher factory utilization and better yields. Operating expenses (GAAP) for the third quarter of 2013 increased to $73.4 million from $67.1 million in the year-ago quarter, primarily due to higher R&D spending.
Balance Sheet
At quarter-end, cash and cash equivalents aggregated $26.3 million. Total cash investments decreased by $62.4 million to $26.9 million during the reported quarter, primarily due to a $20 million debt repayment to the revolving credit facility. Capital expenditure of $20.8 million was primarily related to capacity expansion for premium filters.
Outlook
Going forward, TriQuint expects fourth quarter 2013 revenues to be in the range of $260 million to $270 million, with non-GAAP gross margin in the range of 35% – 36%, driven by higher revenues. Non-GAAP earnings are expected to be between 12 cents and 14 cents per share.
TriQuint is expanding its capacity for high-performance filters as it anticipates a strong demand in the later 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 build on its margin momentum. In order to further brace up for the next and larger LTE expansion, TriQuint has restructured its factories and aligned its mobile product strategy around premium filters, high-efficiency amplifiers, and densely integrated solutions.
TriQuint currently has a Zacks Rank #3 (Hold). Other notable companies in the sector that are worth mentioning include ARM Holdings plc (ARMH), Avago Technologies Limited (AVGO) and Entropic Communications, Inc. (ENTR), each carrying a Zacks Rank #2 (Buy).
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