SAN FRANCISCO —In another signal that the semiconductor market recovery remains in full swing, chip makers Qualcomm Inc., SanDisk Corp. and Intersil Corp. all reported quarterly results that exceeded consensus analyst expectations.
Qualcomm (San Diego) reported a first quarter net income of $774 million on revenue of $2.66 billion.
Sales declined nominally compared with the previous quarter, but increased by 8 percent compared with the year ago quarter, Qualcomm said. First quarter net income swung to the positive compared with the year ago quarter, but was down from a net income of $841 in the previous quarter, Qualcomm said.
Consensus analyst expectations had called for Qualcomm to report quarterly revenue of $2.63 billion, according to Yahoo Finance.
In a statement, Paul Jacobs, Qualcomm chairman and CEO, said the company's quarter was driven by healthy shipments of chips supporting 3G phones. The number of 3G subscribers worldwide has now surpassed 1 billion, Jacobs said.
While Qualcomm’s revenue and profit declined sequentially, industry-wide revenue for all semiconductors used in cell phones in the calendar first quarter amounted to $9.4 billion, up 4.6 percent from $9 billion in the fourth quarter of 2009, according to a preliminary estimate from market research firm iSuppli Corp. This sequential growth in sales runs contrary to the normal seasonal pattern, wherein cell-phone-related semiconductor sales decline in the first quarter from the holiday—driven peak in the fourth quarter, the firm said.
“The unusually strong conditions in the global mobile phone semiconductor market in the first quarter mainly were driven by the smartphone segment and rising sales of 3G handsets,” said Francis Sideco, principal analyst for wireless communications at for iSuppli. “Smartphones contain more semiconductor content than plain cell phones, and their share of total mobile handset shipments is rising. Meanwhile, 3G phones also carry a higher semiconductor content than the older 2G models, and represent an increasing portion of total cell phone sales.”
Sideco said Qualcomm has in recent times been losing market share in mobile handset ICs to competitors including ST-Ericsson, Infineon and MediaTek. The trend likely continued last quarter, he said.
Craig Berger, an analyst with FBR Capital Markets, called Qualcomm's fiscal second quarter earnings a disappointment. He wrote in a report circulated Thursday that Qualcomm has reported a string of quarters with little overall growth in revenue and profit dating back to mid-2007. He said Qualcomm is being negatively impacts by chipset share losses to Mediatek and Broadcom, chipset pricing pressure due to competition, device pricing pressure as smartphones get cheaper, falling royalty rates and excessive operating expense spending. FBR cut its share price target and calendar year profit estimate for Qualcomm, but maintained its “outperform” rating on Qualcomm's stock.
Qualcomm’s stock took a hit Wednesday when investors reacted to the company’s sales targets for the current quarter and fiscal year. Qualcomm said it expects revenue for the current quarter to be between $2.5 billion and $2.7 billion, which would represent a year-to-year decrease of between 2 and 9 percent. For the fiscal year, Qualcomm said it expects revenue of between $10.4 billion and $11 billion, which would be roughly flat to up 6 percent compared with fiscal 2009.
Meanwhile, saying the company started the year off on a record pace, flash memory card and chip vendor SanDisk posted a GAAP net income of $235 million on revenue of $1.1 billion.
First quarter sales were up 65 percent compared with the year-ago quarter, but down 12 percent sequentially, SanDisk (Milpitas, Calif.) said. The company swung to profit from a loss of $208 million in the first quarter of 2009, but net income was down compared to the company’s profit of $340 million in the fourth quarter of 2009.
Consensus analyst expectations had called for SanDisk to report quarterly revenue of $985 million, according to Yahoo Finance.
Eli Harari, SanDisk’s chairman and CEO, said through a statement that it was the first time SanDisk had exceeded $1 billion in revenue during the first quarter of a year. Harari attributed the performance to several factors, including SanDisk’s OEM business, which accounted for 63 percent of the company’s revenue during the quarter.
Analog/mixed-signal chip maker Intersil reported a first quarter net income of $27.7 million on revenue of $189.4 million.
Sales were up by 7 percent compared to the fourth quarter of 2009 and up by 60 percent compared with the first quarter of 2009,Intersil (Milpitas) said. Net income increased by 56 percent compared with the previous quarter and by more than 1,000 percent compared with $2.4 million in the year-ago quarter.
Consensus analyst expectations had called for Intersil to report quarterly revenue of $185million, according to Yahoo Finance.
Intersil said it derived nearly 20 percent of its first quarter revenue from the high-end consumer market, with 32 percent of revenue from computing, 24 percent from industrial and 24 percent from communications.
“The industrial and communications end markets continued their strong recoveries, while our computing end market performed better than anticipated due to strength in the worldwide PC business,” said Dave Bell, Intersil's president and CEO, in a statement. “Inventories remain stable at historically low levels and our manufacturing capacity has kept lead times much lower than many of our competitors.”
For the current quarter, Intersil said it expects revenue to grow to between $200 million and $208 million, up 6 to 10 percent sequentially.
Source : eetimes.com
