1 August 2014

AXT returns to quarterly profitability ahead of plan

For second-quarter 2014, AXT Inc of Fremont, CA, USA has reported revenue of $21.4m, down 11% on $23.8m a year ago but up 11% on $19.3m last quarter.

“While the business environment remains challenging, during the second quarter we experienced stronger demand in both our semi-insulating and semi-conducting gallium arsenide substrates as well as continued strength in indium phosphide,” says CEO Morris Young.

By product sector, gallium arsenide (GaAs) substrate revenue was $11.3m, up 33% on $8.5m last quarter and 8% on $10.6m a year ago. Indium phosphide (InP) substrate revenue was $3m, up 36% on $2.2m last quarter and 50% on $2m a year ago. Germanium (Ge) substrate revenue was $1.7m, almost halving from last quarter’s $3.2m and less than a third of the $5.3m a year ago. Raw materials sales were $5.4m, level with $5.4m last quarter but down from $5.8m a year ago.

Gross margin has rebounded from just 12.9% a year ago followed by a further dip to 14.1% last quarter, reaching 19.4%. Operating expenses have been cut from $5.1m last quarter to $4.7m, due mainly to cost-saving initiatives implemented during Q1.

Net income was $319,000 ($0.01 per diluted share), compared with net loss of $2m ($0.06 per diluted share) both last quarter and a year ago. During the quarter, cash and cash equivalents rebounded, from $22.8m to $26.3m.

“Through a combination of higher revenues, positive sales mix, other income and the first full quarter of benefit from our cost-savings measures, we achieved profitability ahead of our plan,” notes Young. “With continued focus on cash management, we drove improvement in our balance sheet, growing our cash position and reducing inventory,” he adds.

“Looking forward, we remain cautiously optimistic about our opportunities to drive further growth in our business,” Young says.

See related items:

AXT reports higher-than-expected GaAs and InP revenue in Q1

AXT’s revenue falls 9% in Q4 to $18.6m, but decline in GaAs levels out

AXT’s revenue falls 14% in Q3 to $20.5m, driven by wireless consolidation and new technologies

AXT’s revenue grows 4.5% in Q2

Tags: AXT GaAs GaAs substrate InP Germanium

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