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International Rectifier Q2 Loss Sharply Widens; Guides Q3 Revenue In Line

Semiconductor company International Rectifier Corp. (IRF) reported Monday a loss for the second quarter that sharply widened from last year, reflecting significantly lower margins, charges and a revenue decline.

Adjusted loss per share also came in wider than analysts' expectations, but quarterly revenues matched their estimates. The company also provided revenue guidance for the third quarter, in line with Street view.

"We expected a challenging December quarter given industry conditions. Although revenue declined, we significantly reduced our inventory, continued to reduce our costs and increased our cash balance by $16 million," President and CEO Oleg Khaykin said in a statement.

The El Segundo, California-based company reported a net loss of $32.72 million, or $0.47 per share for the second quarter, wider than $6.34 million, or $0.09 per share in the prior-year quarter.

Results for the latest quarter primarily include effects of accelerated depreciation, asset impairment and inventory write-offs associated with its El Segundo fab closure, severance payments, impairment of goodwill, amortization of intangibles, the associated net tax effects of these items, and discrete tax provisions and benefits.

Excluding items, adjusted net loss for the quarter was $30.29 million, or $0.44 per share, compared to loss of $2.67 million, or $0.04 per share in the year-ago quarter.

On average, six analysts polled by Thomson Reuters expected the company to report a loss of $0.47 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter decreased 11.4 percent to $223.82 million from $230.08 million in the same quarter, but matched six Wall Street analysts' consensus estimate of $223.26 million.

Gross margin for the quarter plunged 13.5 percentage points to 21.9 percent from last year's 35.4 percent.

Looking ahead to the third quarter, the company forecasts revenues in a range of $220 million to $235 million. Street is currently looking for third-quarter revenues of $230.19 million.

"The market indicators are showing encouraging signs that a bottom has formed and demand is slowly starting to improve. As demand returns into the summer, we would expect positive momentum from rising utilization, increasing turns and improving product mix," Khaykin added.

IRF closed Monday's regular trading session at $20.10, up $0.36 or 1.82% on a volume of 0.97 million shares.

by RTTNews Staff Writer

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