) reported second-quarter 2013 earnings per share of 10 cents,
comprehensively beating the Zacks Consensus Estimate of 2 cents
loss per share.
The company reported revenues of $144.8 million, down 11.2% year
over year but up 9.9% sequentially and above management's
guidance of $135-$142 million. The sequential increase was due to
strong demand in Industrial & infrastructure as well as
consumer end markets, partially offset by relative weakness in
Revenues by End Market
Industrial & infrastructure comprised 60% of Intersil's sales
in the quarter, up 12.3% sequentially but down 9.2% from the
year-ago quarter. The sequential increase was due to strong
demand for products in automotive, industrial and aerospace
Intersil's Personal computing segment generated 20% of its sales,
down 7.4% sequentially and 28.5% from the year-ago quarter. The
decrease was due to a weak PC market.
Intersil's Consumer segment generated the remaining 20% of its
sales, up 25.3% sequentially and 7.4% from the year-ago quarter.
The increase was due to improved demand in the gaming and display
Reported gross margin for the quarter was 55.2%, up 70 basis
points (bps) year over year and 140 bps sequentially.
Higher-than-expected volumes and an improved mix drove gross
margins in the quarter.
Operating expenses (SG&A and R&D) of $63.4 million were
down 23.2% from $82.6 million in the year-ago quarter. The
reported operating margin was 5.0%, up significantly from the
year-ago quarter margin of (5.7%). Both selling, general and
administrative (SG&A) expenses as well as research and
development (R&D) expenses increased as a percentage of
The quarter's GAAP net income was $1.0 million or earnings per
share of 1 cent compared with $2.5 million or earnings of 2 cents
in the prior quarter. Excluding special items but including
stock-based compensation expenses, adjusted net income was $12.8
million or earnings per share of 10 cents compared with $6.3
million or 5 cents a share in the prior quarter.
The company ended the second quarter with cash and short-term
investments balance of $161.7 million, up from $161.2 million in
the prior quarter. Trade receivables were $49.4 million, down
from $52.4 million in the prior quarter.
Cash flow from operations was $24.7 million compared to ($32.1)
million in the year-ago quarter. Capex was $7.0 million versus
$3.1 million in the year-ago quarter. Free cash flow was $17.7
million versus ($35.2) million in the year-ago quarter.
During the quarter, the company did not repurchase any shares but
paid a total dividend of $15.9 million.
For the third quarter of 2013, Intersil expects total revenue in
the range of $146-$152 million, representing a sequential
increase of 2.9% at the mid-point. Gross margins are likely to be
flat sequentially. The company expects GAAP operating expenses of
$74-$81 million and non-GAAP operating expenses of $55-$57
GAAP (loss)/earnings per share are expected to be in the range of
(3 cents) to 1 cent, while non-GAAP earnings per share are likely
to be in the range of 15 cents to 18 cents.
Intersil Corp designs and manufactures high-performance analog,
mixed-signal and power components, focused on power management
applications. The company reported a solid quarter, with earnings
exceeding the Zacks Consensus Estimate.
Also both top-line as well as bottom line figures were above the
prior quarter figures. Management also gave a modest third
quarter guidance, which indicates improving demand visibility and
an overall improving analog market.
Additionally, we believe that the company's new products and
design wins in the quarter will likely drive demand for light
sensor products going forward. We also remain optimistic about
Intersil's long-term prospects and contend that its restructuring
activities will reduce fixed cost base and operating expenses.
Currently, Intersil shares have a Zacks Rank #2 (Buy). Investors
can also consider some other stocks with a positive Zacks Rank
and an expected surprise prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), Earnings ESP of +8.33% and a Zacks Rank #2 (Buy)
), Earnings ESP of +1.96% and a Zacks Rank #2 (Buy)
Scientific Games Corporation
), with an ESP of +100.0% and a Zacks Rank #3 (Hold)
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