INDUSTRY STOCKS
incorporation of the firm’s low-power tuneable lasers and optical subassemblies. These products and the acquisition of u2
t will
help to swell sales, which should hit $296 million to $311 million in the fourth fiscal quarter. Gross margins for that period should be 35.5 percent.
TriQuint’s soaring shares
Nestled between Oclaro and Finisar on the leader board is TriQuint, a company with a share prices that has soared from just below $6 to more than $14 in the last 12 months. It would be both easy and wrong to ascribe all of this gain to the upcoming merger with RFMD. The announcement of that merger is partly to thank – when that news came out, the share price leapt from about $9 to $11, and since then is has climbed further – but it is worth noting that TriQuint’s share price increased by 50 percent between May 2013 and early February 2014.
Between those dates the share price shot up by 17 percent on the second quarter earnings and guidance, and nosedived by 20 percent when the third quarter earning were unveiled. Although the second quarter earnings were not that impressive – revenue hit $190.1 million, up 3 percent sequentially – the
market was wooed by the promise of far better times ahead. Back then CEO Ralph Quinsey said: “In quarter three 2013, I expect revenue to jump 30 percent sequentially, bringing significantly improved margins and profitability. I believe quarter three is the beginning of a stronger period of performance for TriQuint, built on a differentiated strategy that is defensible and sustainable.”
The company predicted sales for the third quarter of $245 million to $255 million, and on 24 October it revealed that it had met that, posting revenue of $250.8 million. But investors were not that happy – failing to meet its earnings per share forecast did not go down well, and although the company was predicting further sales growth, it was slowing down. It took until early February 2014 for the share price to recover from the knock it took following those results, before jumping on the announcement of the merger for reasons discussed in this month’s feature “RFMD + TriQuint = ?” (see p.36)
Tough times for Anadigics While share prices of TriQuint’s peers, RFMD and Skyworks, have also increased by more than 50 percent in the last month, it’s not been a great time for every player in this sector. Over that
Increasing use of cloud computing is leading to the growth of datacentres, and aiding the sales of optical component manufacturers such as Oclaro and Finisar.
June 2014
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