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sales of $346 million and a profit of $37 million. This is made up of LED products revenue of $201 million, with profit of $84.2 million and a 41.9 percent gross margin; sales of lighting products that netted $122.7 million, with a profit of $41.4 million and a 33.7 percent gross margin; and sales of power and RF products that generated $22.6 million, with a gross profit of $12.8 million and a 56.6 percent gross margin.
Third quarter sales in these three divisions were similar to the previous quarter, with total revenue rising by
1 percent to $349 million. The gross margin for LED products increased by almost 2 percent, thanks to higher volumes, while the gross margin for lighting products fell to 30.6 percent, due to start-up costs related to the company’s launch of its LED bulb.
The outlook for the future is promising. “We target quarter-four revenue to be in the range of $365 million to $385 million, which is comprised of double-digit lighting revenue growth, driven by both commercial fixtures in LED bulbs, single-digit growth in LED revenue and power and RF revenue up slightly,” said Swoboda in a conference call discussing third quarter earnings. Overall, gross margins are expected to rise by about 1 percent, due to a combination of increased volumes, cost reductions and lower-cost new products.
Vertical integration for high-power lasers In second place on this year’s share price leader board is the world’s leading maker and provider of fibre lasers, IPG Photonics. During the last 12 months, shares in this firm made there biggest gains following the report of second fiscal quarter results in late July 2012, and since then the share price has hovered between $55 and $70.
The hike in July resulted from record quarterly revenue of $137.9 million, which exceeded expectations; a year-over-year profit increase of 23 percent; and a very strong subsequent forecast. Company CEO Valentin Gapontsev attributed those strong results to: wider adoption of lasers by manufacturing companies; an increase in the rate of adoption of fibre lasers; and the fact that several key industries for the company – such as automotive and consumer electronics – were doing relatively well in a tough economic climate and investing in new technologies. At that point in time, Gaponstev could list five of the world’s largest automotive companies among its customers, and he expected that they would be investing in more fibre lasers, which are well suited to processing aluminium – this metal is featuring in more and more car designs.
IPG’s third fiscal quarter sales that spanned the three months up to 30 September, 2012, exceeded guidance, hitting $156.4 million, while profit soared to $42.4 million. Investors, however, focused on a book-to-bill ratio that fell below unity, and a forecast of slightly lower revenue for the fourth quarter. Shares slipped by about 10 percent when these quarterly earnings came out, but more than recovered by the time the next set of
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www.compoundsemiconductor.net June 2013
Left: Cree’s launch of a range of LED bulbs helped to drive up the company’s share price
results were reported on 15 February.
On that day investors learnt that sales for the last quarter of fiscal 2012 were $145 million, and the corresponding profit and gross margin were $34.9 million and 51.8 percent. Commenting on these results, Gapontsev said: “We are excited by IPG’s prospects for growth in 2013. Order flow was very strong in January despite a book-to-bill that was less than one in quarter four.”
Again, investors were not impressed with results, and the share price fell by around 10 percent, but it climbed since then, before taking a small dip when first fiscal results were announced on 1 May. Sales for this most recent quarter are down $3 million sequentially, while gross margin is up 1.5 percent. The next set of results should be better – guidance for the next quarter is for revenue in the range of $155 million to $165 million profit, which is expected to increase to about $40 million.
RFMD’s diversification pays dividends Manufacturer of RF components, RFMD, is third on the leader board. Its valuation has risen by just over 25 percent in the 12 months up to 30 April 2013.
CEO Robert Bruggeworth puts RFMD’s financial success during that period down to the best customer diversification in the company’s history. Talking to investors during a conference call on 23 April 2013 to discuss fourth fiscal quarter earnings (the three months up to 30 March, 2013), he remarked that the company is well positioned in the entry segment, where it is offering CMOS PAs: “We are accelerating the adoption of our RF CMOS technology into new markets and new customers, and we anticipate this will provide a path to lower costs and improved margins in our 2G product portfolio. This is especially meaningful in China where RFMD enjoys a leadership position.”
At the other end of the spectrum, the company expects strong growth in sales of its 3G and 4G LTE devices that will be used in multiple flagship product launches. Success here is particular valuable for RFMD, because RF content in these devices is rising fast. “It’s also important because of the increase in device complexity related to the additional frequency band combinations and the increasing requirements for new technologies such as antenna tuning, envelope tracking and carrier aggregation,” says Bruggeworth. “RFMD is an early pioneer and the current leader across these next-generation RF technologies.”
RFMD netted sales of $280.6 million in the most recent quarter, up 3.5 percent sequentially and a gain of 49 percent year-over- year. Income for the quarter was $17.1 million. Guidance for the next quarter is revenue of $285 million to $290 million and a slight increase in profit. Telco woes continue
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