AXT announces positive Q3
AXT, the manufacturer of compound semiconductor substrates, has posted its financial results for Q3 ended Sept. 30, 2014. After a loss from operations of $515,000 in the second quarter of 2014, in Q3 it has reported a profit of $653,000.
Revenue for the third quarter of 2014 was marginally up at $23.1 million compared with $21.4 million in the second quarter. Gross margin was 23.0 percent of revenue for the third quarter of 2014, compared with 19.4 percent of revenue in the second quarter of 2014. Operating expenses were $4.7 million in the third quarter of 2014, unchanged from $4.7 million in the second quarter of 2014. Shares rose 8.72 percent in response to the results.
"The third quarter was a positive quarter for AXT," said Morris Young, chief executive officer. "Revenue came in ahead of our expectations, and we achieved another quarter of profitability through improved gross margins and tight expense control. Further, we are diversifying our customer base throughout our product portfolio and are pleased to be gaining traction in several areas that have been a strong focus of our sales efforts."
He added: "The changes in the GaAs landscape over the past two years have had an adverse impact on our business. However, these changes are finally beginning to settle and new applications for our products are emerging across our substrate portfolio. I am very pleased to have a strong team in place with the expertise to maximise our potential as we evolve our business to meet new opportunities."
Net interest and other income for the third quarter of 2014 was $260,000. This was primarily attributable to $390,000 from equity earnings of the company's unconsolidated joint ventures, $302,000 from the sale of IntelliEpi stock, $556,000 from a loss on foreign exchange and $106,000 from interest income. By comparison, net interest and other income for the second quarter of 2014 was $1.2 million. This was primarily attributable to $625,000 from equity earnings of the company's unconsolidated joint ventures, $324,000 from the sale of IntelliEpi stock, $158,000 from a gain on foreign exchange and $127,000 from interest income.
Net income in the third quarter of 2014 was $644,000 or $0.02 per diluted share compared with a net income of $319,000 or $0.01 per diluted share in the second quarter of 2014.AXT designs, develops, manufactures and distributes high-performance compound and single element semiconductor substrates comprising GaAs, InP and Ge through its manufacturing facilities in Beijing, China. AXT maintains its sales, administration and customer service functions at its headquarters in Fremont, California.