Semiconductor manufacturer Applied Micro Circuits Corporation (AMCC) reported third-quarter fiscal 2015 GAAP net loss of $12.1 million or loss of 15 cents on a per share basis versus a net loss of $7.3 million or loss of 10 cents per share in the year-ago period. The year-over-year decline despite lower operating expenses was primarily driven by lower revenues. The GAAP loss for the reported quarter matched exactly with the Zacks Consensus Estimate.
On a non-GAAP basis, Applied Micro reported a net loss of $7.1 million or loss of 9 cents per share compared with a net income of $1.6 million or 2 cents per share in the year-earlier quarter.
Quarter Details
Net revenues for the third quarter of fiscal 2015 were $36.7 million versus $54.8 million in the year-ago quarter. Net sales for the reported quarter beat the Zacks Consensus Estimate of $36.0 million.
Revenues from the computing business grossed $14.2 million in the quarter, while the connectivity business generated $22.6 million. Geographically, sales to Asia accounted for approximately 48% of total revenue, followed by North America (41%) and Europe (11%).
Operating expenses for the reported quarter declined to $33.6 million from $40.9 million in the year-ago quarter. Selling, general and administrative expenses were $8.7 million versus $10.9 million in the prior-year period. R&D expenses were $24.7 million in third-quarter fiscal 2015 versus $29.9 million in the year-earlier quarter.
Non-GAAP gross margin of 59.8% was above the guidance range in the reported quarter, primarily due to product mix.
At quarter end, Applied Micro had cash, cash equivalents and short-term investments of $83.0 million. Net cash used in operating activities was $5.8 million versus net cash flow of $1.9 million in the prior-year period. Channel inventory, excluding certain non-cancelable non-returnable orders, was 64 days, up from 59 days in the prior quarter and was in tune with the corporate objectives.
Outlook
Applied Micro expects to generate decent revenue in the fourth quarter with new product introductions, lean channel inventory levels, a high book-to-bill ratio and strong backlog coverage. The company expects embedded computer products to generate healthy revenue growth in the forthcoming quarters driven by X-Gene based embedded products.
For fourth-quarter fiscal 2015, total revenue is expected in the range of $36.5 million plus or minus $2 million. Non-GAAP operating expenses are expected within $26.0 million and $28.0 million, while non-GAAP gross margin is expected in the range of 55% plus or minus 2%. Non-GAAP loss is anticipated to be 9 cents per share plus or minus 2 cents.
With relatively lackluster results that somehow managed to meet the bottom-line expectations, share prices were down by 8 cents to close at $5.80 as of Jan 28, 2015 following the earnings release.
Applied Metro currently has a Zacks Rank #3 (Hold). Better-ranked players in the industry that are worth mentioning include Ambarella, Inc. (AMBA), Avago Technologies Limited (AVGO) and Mellanox Technologies, Ltd. (MLNX), each carrying a Zacks Rank #1 (Strong Buy).
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