International Rectifier Corp.
) has reported first-quarter 2013 loss of 20 cents per share,
better than the Zacks Consensus Estimate of 26 cents loss per
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The company reported revenue of $252.5 million, down 16.6% year
over year due to an overall weak demand environment.
Revenues declined across the board with Enterprise power segment
being the only exception. Power management devices revenue
decreased 18.3% year over year to $90.8 million; Energy saving
products revenue decreased 41.7% to $44.4 million; Automotive
products revenue declined 0.3% to $28.8 million while HiRel
revenue dropped 0.8% to $48.4 million. Enterprise power revenue,
however, increased 5% to $37.8 million.
Intellectual property revenue was $2.1 million in the quarter,
which included a one-time patent sale of $1.7 million.
Reported gross margin for the quarter was 27.9% versus 37.9% in
the year-ago quarter. The lower gross margins were due to an
unfavorable mix and lower utilization rates in the quarter.
Operating expenses (SG&A and R&D) of $80.7 million
decreased 1.6% year over year. The reduction in selling, general
and administrative (SG&A) and research and development
(R&D) expenses from the prior quarter was due to reduced
The reported operating margin decreased significantly from the
year-ago quarter. Both, SG&A and R&D expenses increased
as a percentage of sales from the year-ago quarter. Moreover,
lower gross margins led to the decrease in operating margin.
The quarter's GAAP net loss was $28.8 million or loss per share
of 42 cents, compared with a net income of $22.0 million or 31
cents earned in the comparable quarter last year. Excluding
special items, non-GAAP net loss was $13.9 million or loss per
share of 20 cents compared with net income of $25.4 million or
earnings of 36 cents a share in the year-ago quarter.
The company has a cash and cash equivalents, restricted cash and
short-term investments balance of $356.2 million, down from
$369.9 million in the prior quarter. Trade receivables were
$151.6 million, down from $168.5 million in the prior quarter.
Cash flow from operations was $6.5 million versus $16.6 million
in the year-ago quarter. Capex was $22.0 million versus $45.2
million in the year-ago quarter.
For the second quarter of 2013, International Rectifier expects
total revenue in the range of $215-$230 million, which is
sequentially weak to reflect overall weak demand environment.
Gross margins are expected in the range of 22% to 23%, research
and development expense in the range of $32 to $33 million,
sales, general and administrative expense of approximately $46
million, asset impairment, restructuring and other charges of $2
to $3 million, and other expense of $1.5 million.
International Rectifier designs, manufactures, and markets analog
integrated circuits (ICs) and power components, focused on power
management applications. Though the company reported a
disappointing quarter, the loss incurred was narrower than
In the quarter, the company performed poorly with both its
revenue and gross margins decreasing from the prior quarter.
Management gave a weak second quarter guidance, which reflects
poor fundamentals, macro weakness, and pronounced weakness in
However, we remain optimistic about the company's long-term
prospects and its decision to initiate operational restructuring
activities to reduce fixed cost base and hence reduce operating
The company faces stiff competition, particularly from
Fairchild Semiconductor International Inc.
Vishay Intertechnology Inc.
Currently, International Rectifier has a Zacks #4 Rank, implying
a short-term Sell rating.