News Article
Rubicon’s sapphire fires revenues up 64%
The increased revenues, compared to the same quarter last year, were mainly due to strong sales of the firm’s six inch polished sapphire wafers which totalled $24.9 million in the quarter.
Rubicon Technology, a provider of sapphire substrates and products to the LED, RFIC, Semiconductor, and Optical industries, has reported financial results for its third quarter ended September 30, 2011.
The Company reported third quarter revenue of $33.6 million, which was at the high end of previously provided estimates due to strong sales of its six inch polished wafers which totalled $24.9 million in the quarter, a 79 percent sequential increase.
Gross margins in the third quarter were 48%, which was the top of management's previously provided guidance. Net income for the quarter totalled $8.2 million, resulting in diluted earnings per share of $0.35, driven by a favourable product mix and higher than anticipated pricing on two through four inch cores sales. Approximately $5.5 million of Rubicon common stock was purchased under the share repurchase program announced in the last quarter.
Raja Parvez, President and CEO of Rubicon Technologies, commented, "Although overall substrate demand from the LED market declined in the third quarter, major LED chip manufacturers continue to focus on migrating to larger diameter substrates in order to gain efficiencies. As a result, we had strong growth in revenue from our six inch polished wafers which helped to compensate for reduced orders of two through four inch sapphire cores."
The Company ended the third quarter with $72.6 million in cash and short-term investments and no debt. In the third quarter, the Company repurchased approximately 425,000 shares of its common stock at an average price of $12.90 per share. At the end of the third quarter, the company had $19.5 million authorised for future repurchases of its common stock under the current program.
Fourth Quarter 2011 Guidance
Commenting on the outlook for the fourth quarter of 2011, Parvez said, "Previously, we had anticipated improved demand for sapphire products by the end of the third quarter. However, we now expect to see continued softness in the LED market at least through the fourth quarter. Although inventory levels at our customers are in decline, there continues to be excess inventory throughout the supply chain limiting our visibility on future orders for two through four inch sapphire cores.”
“As a result, we expect prices for those products will decline further in the fourth quarter. Additionally, the prolonged weakness in the LED market could also impact six inch polished wafer volumes and pricing making projecting fourth quarter results particularly challenging. As a result of these challenging market conditions, we expect revenue in the fourth quarter to be between $20 and $23 million, gross margins in the low to mid-thirty percent range, and diluted EPS to be in the range of $0.07 to $0.10," Parvez concluded.
Rubicon hosted a conference call to review the highlights of the third quarter 2011 results and the fourth quarter 2011 outlook. An audio replay of the call may be accessed until 11:59 p.m. Eastern time on November 16, 2011, and can be accessed by dialling
(888) 286-8010 (from U.S.) or (617) 801-6888 (from outside the U.S.) (international). Callers should reference conference ID 47103993.
The webcast will be archived on the Company's website.
