INDUSTRY STOCKS
Although the majority of compound semiconductor companies listed on the leaderboard have failed to keep pace with the NASDAQ, many of those that have outperformed this composite have done so by significant margins.
time frame, Anadigics’ share price has tumbled by more than 40 percent, and it is now footing the leader board. Its share price did not take a hammering when the RFMD-TriQuint merger was announced in February, but since the start of March it has slid from $1.80 to $1.25.
Insight into the current state of Anadigics’ business was provided in the earnings call on 30 April 2014 discussing first fiscal quarter earnings. On that day Terry Gallagher, Vice President and CFO of Anadigics, told investors that revenue for the first quarter totalled $23.3 million. That was a sequential decrease of 35.9 percent or $13 million, and in line with prior guidance.
Gallagher broke this down, detailing first quarter sales for cellular of $12.8 million, a 23.4 percent decline; Wi-Fi revenues of $5.1 million, a 64.9 percent sequential decrease; and infrastructure revenues of $5.4 million, up 4.5 percent sequentially. In this quarter gross margin was just 10.9 percent, capacity utilisation was just 45-50 percent, and the company made a net loss of $9.6 million.
Despite all these negatives, CEO Ron Michels was upbeat: “2014 represents a pivotal year for Anadigics. We believe that our business has moved past the turning point and is on a solid path to achieve EBITDA objectives later this year.” According to him, the company has attractive products in many different markets, which should lead to greater sales in the coming months and years.
“During the first quarter, we announced several new mobile devices that are powered by our front-end ICs, including the Huawei P6S and Samsung Galaxy Tab Pro,” said Michels, who
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www.compoundsemiconductor.net June 2014
added that the company is shipping production volumes of its latest infrastructure power amplifiers.
Anadigics may also branch out into new markets, by investing in the research and development of a wafer process technology. “This process technology – offered as a foundry service – provides greater scalability, higher performance and increased value in the production of the VCSEL lasers,” said Michels, who pointed out that these optical emitters can enable motion capture and sensing capabilities in many high-volume applications, ranging from smartphones to gaming devices.
If Michels can deliver on his promises and get the company inching nearer to profitability, Anadigics’ share price will start to climb. And as Oclaro has shown this year, sometimes that is all it takes to top the leader board. Can Anadigics do this in 2015? Well, we’ll just have to wait and see.
© 2014 Angel Business Communications. Permission required.
TriQuint’s shares shot up by 17 percent following the report of second fiscal quarter earnings, which included company CEO Ralph Quinsey telling investors that sales would increase by 30 percent in the following quarter.
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