AXT improves profits and margins
A positive Q1 despite a dip in revenue, says CEO Morris Young
AXT has announced its Q1 2018 results. Revenue was $24.4 million, compared with $26.3 million in the fourth quarter of 2017 and $20.6 million for the first quarter of 2017. Operating profit for the first quarter of 2018 was $3.9 million, compared with operating profit of $3.7 million in the fourth quarter of 2017 and $1.4 million for the first quarter of 2017.
Gross margin was 39.2 percent of revenue for the first quarter of 2018, compared with 37.2 percent of revenue in the fourth quarter of 2017 and 30.5 percent for the first quarter of 2017. Operating expenses were $5.6 million in the first quarter of 2018, compared with $6.1 million in the fourth quarter of 2017 and $4.9 million for the first quarter of 2017.
Interest and other, net was a loss of $0.4 million for the first quarter of 2018, compared with a loss of $0.3 million in the fourth quarter of 2017 and a loss of $0.8 million for the first quarter of 2017. Interest and other, net for the first quarter of 2018 included interest income of $0.1 million, a foreign exchange loss of $0.2 million and a net loss of $0.3 million from the seven partially owned companies in the company's supply chain, accounted for under the equity method.
Income tax expense in the first quarter of 2018 was $0.3 million, compared with $0.1 million in the fourth quarter of 2017 and $0.2 million for the first quarter of 2017.
Net income in the first quarter of 2018 was $2.9 million, or $0.07 per diluted share, compared with a net income of $3.1 million or $0.08 per diluted share in the fourth quarter of 2017 and $0.7 million or $0.02 per diluted share for the first quarter of 2017.
"Although our Q1 revenue was impacted by air quality-related mandatory factory shutdowns in Beijing as previously announced, Q1 was a positive quarter in many respects," said Morris Young, CEO. "We continued to see positive demand for AXT products. In addition, a favourable product mix and good manufacturing yields combined for increased gross margin. Regarding our Dingxing facility, we completed the first phase of facilitisation, installed wafer processing equipment and produced initial wafers that can be used for qualification. We continue to execute our plans, supported by a healthy market environment and solid customer relationships. We are encouraged by the opportunities unfolding across our portfolio, as well as our readiness to participate in them."
