Chinese fabless semiconductor company Spreadtrum Communications, Inc. (SPRD) reported Thursday a profit for the first quarter that declined 31 percent from last year, reflecting a significant drop in margins, partially offset by lower expenses.
Both earnings per share and quarterly revenues topped analysts' expectations.. The company also provided revenue outlook for the second quarter, above Street view.
"During the first quarter we grew volume in the mid- to high-end feature phone segment and secured new design wins with first tier global OEMs that will serve as a foundation for continuing volume increase in the second half. Price competition caused margin pressure as expected," Chairman and CEO Leo Li said in a statement.
The Shanghai, China-based company reported net income of $24.3 million or $0.47 per ADS for the first quarter, lower than $27.5 million or $0.50 per ADS in the prior-year quarter.
On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.39 per share for the first quarter. Analysts' estimates typically exclude special items.
Excluding share-based compensation expenses, adjusted net income for the quarter was $29.3 million or $0.57 per ADS, compared to $30.4 million or $0.55 per ADS in the year-ago quarter.
Total revenue for the quarter increased 17.5 percent to $161.1 million from $137.1 million in the same quarter last year, and topped seven Wall Street analysts' consensus estimate of $160.11 million bu a whisker.
Sales volume of 2G/2.5G baseband and radio frequency bundle semiconductors realized in the quarter rose 39.1 percent year-over-year. Sales volume of 3G bundle semiconductors realized in the quarter more than doubled year-over-year.
The average selling price per unit of 2G/2.5G bundle semiconductors dropped 21.4 percent year-over-year, and average selling price per unit of 3G bundle semiconductors declined 12.7 percent from last year.
The company's operating margin for the quarter contracted 480 basis points to 16.1 percent from last year's 20.9 percent, as gross margin contracted 420 basis points.
"Our operating expenses decreased from the prior quarter due to lower R&D expenses relating to our WCDMA program and a higher offset from recognized government subsidies. We expect our operating expenses as a percentage of revenue to go up slightly in Q2 as we continue to invest in new product development, CFO Shannon Gao added.
Total operating expenses for the quarter were $29.21 million, down 19.9 percent from $35.38 million in the prior-year quarter.
Looking ahead to the second quarter, Spreadtrum said it expects revenues in a range of $170 million to $175 million. Street is currently looking for full-year 2012 revenues of $165.49 million.
"Our smartphone platform is now commercially available and we expect to ship more than one million units in the second quarter. Our customers are targeting a $50-100 retail segment through both China Mobile and open market channels," Li added.
SPRD closed Thursday's regular trading session at $13.43, down $0.31 or 2.26% on a volume of 1.66 million shares. However, the stock surged $2.12 or 15.79% in after-hours trading.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.