Thursday, February 17, 2011

Anadigics Q1 View Misses, Stock Off 9%

Shares of wireless chip maker Anadigics (ANAD) are down 57 cents, almost 8%, at $5.96, after the company reported Q4 results ahead of expectations, but forecast a surprise net loss this quarter and much lower-than-expected revenue, citing “softness in China” and an inventory pile-up.

I would note the company’s remarks below about “WiMax” wireless networking, in particular, being weak, which may be having a somewhat negative impact on Clearwire (CLWR), which is down 14 cents, or 2.6%, this morning at $5.24. Clearwire reports quarterly results this evening.

Q4 revenue rose 44%, year over year, to $60.2, beating the average $58 million estimate, yielding EPS of 7 cents, a penny better than expected.

For the current quarter, the company forecast a net loss of 7 cents to 8 cents per share, versus the 4-cent profit analysts had been expecting. Revenue is expected in a range of $42 million to $44 million, versus the $55.5 million the Street has been modeling.

CFO Tom Shields remarked in the press release that the company is “seeing indications of greater than normal seasonality in the first quarter of 2011 primarily due to softness in China and through our distribution channels relating to excess inventories, coupled with a continued market correction expected to further impact our Cable and WiMax revenue.”

During a conference call with analysts this morning, CEO Mario Rivas addressed the assembled from Barcelona, where he’s been attending the Mobile World Congress, and where he had been meeting this week with “strategic chipset partners,” he said.

Turning to the disappointing revenue outlook, Rivas said, “First of all, let me be specific that we have not lost any significant customer — so let’s remove that from our discussion. However, in the first quarter, what we are experiencing is a combination of the cable and WiMAX market that is currently very soft and has placed considerable strain on the inventories of our customers, including our distributors.”

Rivas added, “In wireless, most of the additional weakness arising in our revenue guidance is coming out of Asia, including our distributors. This, too, is believed to be a short-term inventory correction, coming from our new product design taking hold, commencing during the June quarter.”

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