News Article
AXT Quarterly Revenues up 51% to $26.9 million
The firm expects a reduction of orders in Q1 for semi-insulating GaAs substrates but is anticipating sequential growth in Q2 2011, driven by the demand for wireless, LEDs and photovoltaic devices.
AXT, a manufacturer of compound semiconductor substrates, has reported financial results for the fourth quarter ended December 31, 2010.
Revenue for the fourth quarter of 2010 was $26.9 million, 51% up from $17.8 million in the fourth quarter of 2009.
Total GaAs substrate revenue was $18.7 million for the fourth quarter of 2010, compared with $19.2 million in the third quarter of 2010.
InP substrate revenue was $1.1 million for the fourth quarter of 2010, compared with $955,000 in the third quarter of 2010.
Germanium (Ge) substrate revenue was $3.4 million for the fourth quarter of 2010 compared with $2.3 million in the third quarter of 2010.
Raw materials sales were $3.5 million for the fourth quarter of 2010, compared with $4.4 million in the third quarter of 2010.
Gross margin was 39.8 % of revenue for the fourth quarter of 2010. By comparison, gross margin in the third quarter of 2010 was 39.3 % of revenue. Gross margin was 33.9% of revenue for the fourth quarter of 2009.
Operating expenses were $5.1 million in the fourth quarter of 2010, compared with $3.8 million in Q3 2010. Operating expenses in the Q4 2009 were $3.0 million.
Income from operations for the fourth quarter of 2010 was $5.6 million compared with income from operations of $6.7 million in the third quarter of 2010, and income from operations of $3.1 million in the fourth quarter of 2009.
Net interest and other income for the fourth quarter of 2010 was $422,000, which included an unrealised foreign exchange gain of $242,000. This compares with net interest and other income of $468,000 in the third quarter of 2010, which included an unrealised foreign exchange gain of $210,000, and net interest and other expense of $92,000 in the fourth quarter of 2009, which included an unrealised foreign exchange loss of $163,000.
Net income in the fourth quarter of 2010 was $4.9 million or $0.15 per diluted share compared with net income of $5.6 million or $0.17 per diluted share in the third quarter of 2010, and with a net income of $2.8 million or $0.09 per diluted share in the fourth quarter of 2009.
Management Qualitative Comments
"2010 was a year of tremendous execution for AXT," said Morris Young, CEO of AXT. "Revenue for the year increased by more than 72 % from 2009; our gross margins performance improved by more than 1300 basis points and our net income grew by $20.5 million. These results reflect healthy growth in our markets as well as continued gains, outstanding product quality and tremendous operational execution across our entire organisation.”
“ While we are experiencing some near-term softness in the Taiwanese LED market and expect seasonality in our first quarter semi-insulating gallium arsenide revenues, we believe that we will see sequential growth in our business beginning again in the second quarter, driven by positive secular trends in the demand for wireless devices, LEDs and photovoltaics, as well as gains in our positioning within various customers in our market."
Outlook for First Quarter, Ending March 31, 2011
AXT estimates revenue for the first quarter for 2011 will be between $24.0 million and $25.0 million, which is 28% greater than the first quarter of 2010. The company estimates that net income per share will be between $0.11 and $0.13, which takes into account the weighted average share count of approximately 32.6 million shares.
The company hosted a conference call to discuss these results on February 23, 2011 and the replay may be accessed by dialling (719) 457-0820 until March 2, 2011.
Financial and statistical information discussed in the call is also available on the company's website.
