AXT Q3: a difficult quarter in a challenging market
"We are confident that the underlying technology trends fuelling the applications that drive our success are intact", says CEO Morris Young
AXT, a manufacturer of compound semiconductor substrates, has reported financial results for Q3 ended September 30, 2019.
Revenue for the third quarter of 2019 was $19.8 million, compared with $24.8 million in the second quarter of 2019 and $28.6 million for the third quarter of 2018.
Gross margin was 29.0 percent of revenue for the third quarter of 2019, compared with 34.3 percent of revenue in the second quarter of 2019 and 37.1 percent for the third quarter of 2018.
Operating expenses were $6.2 million in the third quarter of 2019, compared with $6.2 million in the second quarter of 2019 and $6.3 million for the third quarter of 2018.
Income/loss from operations for the third quarter of 2019 was a loss of $0.5 million, compared with an operating profit of $2.3 million in the second quarter of 2019 and an operating profit of $4.3 million for the third quarter of 2018.
Interest income, net for the third quarter of 2019 included interest income of $41,000, a net loss of $0.2 million from the partially owned companies in AXT’s supply chain accounted for under the equity method and a foreign exchange gain and other income totaling $0.2 million.
Income tax expense in the third quarter of 2019 was $23,000, compared with income tax expense of $0.6 million in the second quarter of 2019 and income tax expense of $0.4 million for the third quarter of 2018.
Net loss in the third quarter of 2019 was $0.9 million, or $0.02 per basic share, compared with a net income of $1.5 million or $0.04 per diluted share in the second quarter of 2019 and net income of $3.9 million or $0.10 per diluted share for the third quarter of 2018.
“Q3 was a difficult quarter in a challenging market environment,” said Morris Young, CEO. “But despite the near-term market softness, we are confident that the underlying technology trends fuelling the applications that drive our success are intact.
"In the meantime, we are taking the opportunity to effectively execute our relocation, and are pleased to have met significant milestones with permitting and volume-production readiness. These will allow us to support the expected customer volume ramp over the coming quarters, as well as new business opportunities when the demand environment strengthens.”
