Sunday, February 13, 2011

Anadigics, Inc. (NASDAQ: ANAD): Q4 Earnings Preview 2010

Anadigics Inc. (NASDAQ: ANAD) is scheduled to release its fourth-quarter financial results before the market open on Thursday, February 17, 2011. Analysts, on average, expect the company to report earnings of 6 cents per share on revenue of $58.02 million. In the year ago quarter, the company posted a loss of 5 cents per share on revenue of $41.81 million.

Anadigics, Inc. provides semiconductor solutions to the broadband wireless and wireline communications markets. Its products include power amplifiers, tuner integrated circuits, active splitters, line amplifiers, and other components. 

In the preceding third quarter, the Warren, New Jersey-based company's net income was $2.3 million or $0.03 per share compared with a GAAP loss of $12.9 million or $0.21 per share in the year-ago quarter. Non-GAAP net income was $4.4 million, or $0.06 per share compared with a Non-GAAP loss of $6.4 million or $0.10 per share in the year-ago quarter. Revenue surged to $61.3 million from $36.72 million in the year ago quarter. Analysts, on average, expected the company to report earnings of $0.04 per share on revenues of $57.57 million for the quarter. 

At its last earnings call in November, Anadigics said that it expects sales of around $57 million in the fourth quarter of 2010, down from $61.3 million reported in the previous quarter. The decline is due to a pause in orders caused by inventory rebalancing by most broadband customers following the robust 20% sequential growth reported in the third quarter. Broadband revenue is projected to decline 25% sequentially. Gross margin is estimated to improve. Anadigics expects to report an EPS of 3 cents in the fourth quarter. Excluding one-time charges and stock-based compensation, EPS is projected at 6 cents.  Anadigics expected to exit 2010 with more than $100 million in cash, cash equivalents, and short and long term marketable securities on anticipated positive cash generation in the fourth quarter. 

Anadigics expects 2011 to be a positive year for the company fueled by strong market unit growth based on solid strength for wireless handsets.

The company has benefited from continued strong consumer demand for wireless connectivity in a growing number of consumer devices, including smart phones, datacards, netbooks, notebooks and tablets. Anadigics is positioned in three fast-growing markets: 3G, Wi-Fi and CATV. In addition, the company is increasing its product content in markets where multiple power amplifiers and multiple tuner ICs are needed. The company currently designs chips for third-generation smartphones for Samsung, LG, RIM and Palm, who are well positioned in the rapidly growing 3G market. The rapid growth of smartphones will continue to benefit ANADIGICS in the wireless market.

In the last three months, Anadigics has continued its roll with big design wins for its power amplifier products. Known as “High-Efficiency-at-Low-Power” (HELP) portfolio, the company’s power amplifiers are now used in LG Electronics’ 4G USB wireless modems (for Verizon Wireless); and Samsung’s 3G Galaxy Tab (one model for Sprint and Verizon Wireless in the US; another model for the Korean market). “We are growing at a rate of 50 percent year-on-year,”  CEO, Mario Rivas said recently.

Full Disclosure: None.
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