RF (radio frequency) solutions provider and technology
) reported adjusted net loss of $9.4 million or 6 cents per share
in the first quarter of 2014 versus $27.2 million or 17 cents per
share in the prior-year quarter. Adjusted quarterly loss was
narrower than the Zacks Consensus Estimate of a loss of 17 cents.
The narrower loss in the reported quarter was primarily
attributable to successful cost reduction strategies and an
improved product mix.
Including non-recurring items, reported net loss stood at $19.1
million or a loss of 12 cents per share compared with a net loss
of $27.9 million or a loss of 17 cents per share in the year-ago
Revenues & Margins
Revenues for the reported quarter were $177.6 million, down 4%
year over year, due to unfavorable program timing in the defense
market. Quarterly revenues were in line with the Zacks Consensus
On an end-market basis, quarterly revenues in the Mobile Devices
market, accounting for 58% of total revenue, saw a sequential
drop of 45% year over year driven by seasonality factors and a
temporary inventory correction related to a significant customer.
The Networks market made up 29% of total revenue. Infrastructure
& Defense revenues, accounting for 13% of total revenue, were
up 2.0% year over year and down 4.5% sequentially. Infrastructure
continues to witness healthy demand for base station products in
China. The book-to-bill ratio for the reported quarter was the
highest in two years at 1.22.
Adjusted gross profit was $62.6 million versus $42.0 million in
the prior-year period, recording a 49% year-over-year increase.
Adjusted gross margin improved to 35.3% up 12.5% from the
year-ago quarter. The increase in margin was driven by improved
product mix and efficient factory management and cost
streamlining efforts. Adjusted operating expenses for the quarter
increased to $70.9 million from $68.0 million in the year-ago
quarter, driven by higher research and development (R&D)
During the quarter, TriQuint introduced 36 new products and
executed key development projects, strengthening its strategic
position in the RF industry.
At quarter end, cash and cash equivalents aggregated $163.5
million compared with $79.0 million at year-end 2013, driven by a
decline in accounts receivable and cash proceeds from employee
stock option exercises.
Proposed Merger with RFMD
In February, TriQuint announced its plan to merge with rival,
RF Micro Devices Inc.
). The consolidated company will possibly be the leading RF
player in the infrastructure and defense markets taken together.
In the mobile space, these two companies have complementary
operations with negligible market overlap.
The merger will offer synergistic benefits and increase the
profitability of the new company through economies of scale and
mutual sharing of manufacturing expertise, research and
development costs and adjustment of staffing expenses. The
transaction is expected to generate $75 million of cost savings
in the first year of its operation, followed by another $75
million in the second year.
The merger is expected to close in the second half of 2014, and
will reportedly be accretive to non-GAAP earnings in the first
full fiscal year of its operations.
Going forward, TriQuint expects second-quarter 2014 revenues in
the range of $215 million to $225 million, indicating a strong
sequential improvement. Revenues are expected to be driven by a
healthy recovery in the mobile segment. Adjusted net income is
expected to be between 6 cents and 8 cents per share. Non-GAAP
gross margin is expected to be 37-38%.
Over the next three quarters, cost reduction initiatives and
improved product mix together are expected to drive gross margins
above 40% on average. Its infrastructure and mobile markets are
expected to witness growth and greater RF value owing to crowded
spectrum, carrier aggregation and increasing LTE (Long Term
Evolution) adoption. The LTE market is in a nascent stage at
present, but its expansion will substantially drive growth for
TriQuint, generating demand for RF content, premium filters and
Bracing itself up for the next and larger LTE expansion, TriQuint
has restructured its factories and aligned its mobile product
strategy around premium filters, high-efficiency amplifiers and
densely integrated solutions. The company seems well positioned
in each of its markets to build on its momentum.
TriQuint currently has a Zacks Rank #2 (Buy). Notable companies
in the sector are
Cypress Semiconductor Corporation
Montage Technology Group Limited
), both carrying a Zacks Rank #1 (Strong Buy).
CYPRESS SEMICON (CY): Free Stock Analysis
MONTAGE TECH GP (MONT): Free Stock Analysis
RF MICRO DEVICE (RFMD): Free Stock Analysis
TRIQUINT SEMICO (TQNT): Free Stock Analysis
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