Conexant Loss Widens on Write-Downs
Thursday July 27, 6:21 pm ET
Conexant Posts Wider 3rd-Quarter Loss on Litigation Expense, Write-Downs
NEWPORT BEACH, Calif. (AP) -- Conexant Systems Inc., which makes chips used in communications devices, on Thursday said it widened its fiscal third-quarter loss on a litigation expense.
The company posted a loss of $67.1 million, or 14 cents per share, in the fiscal quarter ended June 30, compared with a loss of $32.2 million, or 7 cents per share, a year ago. Excluding a litigation expense and a couple of large write-downs, the company would have posted a profit of $18.6 million, or 4 cents per share, versus a loss of $17.6 million, or 4 cents.
Revenue rose 25 percent to $251.6 million from $197.5 million.
Conexant said the increase in what it terms "core" earnings resulted from greater-than-expected results from cost-cutting efforts plus a firming of prices.
Analysts were expecting the company to post "core" earnings of 3 cents per share on revenue of $251.2 million.
The overall loss for the quarter reflected a number of nonoperating items, two of them related to spinoffs of former business. Conexant wrote down the value of warrants in Mindspeed Technologies, a maker of chips for optical networking gear used in the Internet's infrastructure, by $35.1 million. In addition, the value of the company's investment in Skyworks Solutions Inc., its former wireless communications division, was reduced by $18.5 million.
Conexant also recorded a $30 million litigation expense in the quarter related to its May settlement of a patent dispute with Texas Instruments.
For the fourth quarter, Conexant said overall weakness in the PC market and slower sales of certain of its legacy wireless products will drag on revenue, countered somewhat by strength in broadband access products.
Overall, Conexant sees its revenue performance ranging from a rise of 1 percent to a drop of 3 percent compared with the third quarter. "Core" earnings should be 3 cents to 4 cents per share. Analysts are expecting a profit excluding items of 4 cents.
Shares fell 15 cents, or 7.2 percent, to close at $1.93 in trading on Nasdaq ahead of the earnings release, then slipped another 3 cents in electronic after-hours activit
