ANADIGICS, Inc. (ANAD) reported net sales of $60.2 million in the fourth quarter of 2010, down 1.7% sequentially but up 44.1% year over year. The results beat management’s guidance of $57 million – $58 million and the Zacks Consensus Estimate of $58 million.
Coming to revenue mix, wireless revenues accounted for 76% of total revenue while broadband accounted for the remaining 24%. Wireless sales of $46.1 million were a million better than management’s expectations driven by better than expected 3G CDMA sales.
Broadband revenue came in at $14.1 million, an increase of $2 million over management’s expectations driven by higher wireless, LAN and cable sales.
ANADIGICS stated that the demand for instantaneous connectivity anytime, anywhere driven in large part by social networking and mobile video is increasing the need for greater bandwidth across the growing 3-G market.
The demand for the company’s products is being driven by the increasing need for greater bandwidth in the 3G market and roll-out of both WiMAX and LTE networks in the 4G markets.
Gross margin came in at 37.0%, up from 36.2% in the previous quarter and 27.9% in the year-ago quarter. Net income for the fourth quarter was $3.4 million or 5 cents per share in the fourth quarter and a net income of $2.3 million or 3 cents per share in the third quarter.
Excluding one-time charges, but including stock-based compensation expense, net income came in at $0.04 per share, better than the Zacks Consensus Estimate of $0.02.
During the quarter, ANADIGICS used $5 million of cash for operations and used $1.4 million for capital expenditures. As of December 31, 2010, the company had cash and cash equivalents of $97.1 million, up from $87.0 million at the end of the previous quarter.
ANADIGICS posted revenues of $216.7 million in 2010, up 54.3% over 2009. Wireless revenue grew 72% year over year to $160 million. Broadband revenue grew 20% year over year to $56.7 million. Net income for 2010 was $1.3 million, or $0.02 per share.
Excluding one-time charges, but including stock-based compensation expense, net loss came in at $0.02 per share, better than the Zacks Consensus Estimate of $0.05.
Going forward, ANADIGICS projects sales of around $42 million – $44 million in the first quarter of 2011, much below the Zacks Consensus Estimate of $55 million.
ANADIGICS stated that the company has not lost any significant customer but experienced a soft combination of soft cable and WiMAX market which has strained inventories.
The weakness in the revenue guidance was primarily due to weakness from Asia with normal seasonality in Korea and North America. Management believes that this is a short-term inventory correction and expects growth in the second half of 2011. Management expects to see a rebound in the second half of 2011 driven by contribution from new customers.
Excluding one-time charges and stock-based compensation, ANADIGICS projects EPS around 7 cents – 8 cents.
The disappointing guidance for the first quarter led to a 7.04% decline in the share price in regular trading. However, the stock recovered 1.32% to close at $6.15 in after-hours trading.
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