31 October 2011

AXT’s revenue falls 5.7% in Q3 to $28.3m

For third-quarter 2011, AXT Inc of Fremont, CA, USA, which makes gallium arsenide, indium phosphide and germanium substrate and raw materials, has reported revenue of $28.3m, up 5.6% on $26.8m a year ago but down 5.7% on $30m last quarter and below the expected $30.5–31.5m.

Total gallium arsenide (GaAs) substrate revenue was $18.7m, up 3.8% on $18m last quarter but down 2.6% on $19.2m a year ago. Indium phosphide (InP) substrate revenue was $1.5m, down slightly on $1.6m last quarter but up 50% on $1m a year ago. Germanium (Ge) substrate revenue was $3m, up 11% on $2.7m last quarter and 30% on $2.3m a year ago. Raw materials sales were $5.1m, down 34% on $7.7m last quarter but up 16% on $4.4m a year ago.

Although up on 39.3% a year ago, gross margin has fallen from 46.7% last quarter to 43.2%. Despite still being higher than $3.8m a year ago, operating expenses have been cut from $4.4m last quarter to $4.2m. Nevertheless, although up on $6.7m a year ago, income from operations has fallen $9.6m last quarter to $8.1m. Likewise, net income has fallen from $7.1m ($0.21 per diluted share) last quarter to $6.5m ($0.19 per diluted share), although this is still more than the $5.6m ($0.17 per diluted share) a year ago.

For fourth-quarter 2011, AXT expects revenue to fall further to $20-23m, and net income per share to fall further to $0.08-0.12.

“The current environment is presenting both great challenges and great opportunities for AXT. While we are heading into a challenging quarter, we believe that we have established a solid foundation to build upon when markets improve,” says CEO Morris Young. “In all of our key markets, we are in a great competitive position and are actively engaged with new potential customers that can help us to broaden and deepen our footprint in the markets we serve,” he adds.

“Our engineering, manufacturing and operations teams continue to execute well against our goals to provide a broad portfolio of high-quality products and strong customer support,” continues Young. “Further, we have a solid business model that is allowing us to weather near-term weakness, while generating cash and delivering profitability... these factors will provide tremendous opportunity for us as the demand environment improves,” he believes.

See related items:

AXT Q2 revenue rebounds by 22% sequentially to $30m

AXT’s Q1 revenue falls 8.6% to $24.6m

AXT’s Q4/2010 revenue of $26.9m up 51% year-on-year

AXT’s revenue rises 16% in Q3 to $26.8m

Tags: AXT GaAs GaAs substrate InP Germanium

Visit: www.axt.com