Monday, China based wireless baseband chipset provider Spreadtrum Communications, Inc. (SPRD) reported a swing to profit in the third quarter from a loss last year, as revenue jumped 92%. Looking ahead, the company also provided revenue guidance for the fourth quarter.
Third quarter net income of the company was US$0.6 million or US$0.01 per ADS compared to a net loss of US$31.3 million or US$0.71 per ADS in the comparable quarter last year, as a result of increased sales volumes, reduction of old, discounted inventory and vigilant cost management.
Excluding share-based compensation expenses and amortization of intangibles from the Quorum acquisition, Spreadtrum's net income was US$2.9 million or US$0.06 per ADS, compared to net loss of US$4.3 million or US$0.10 per ADS in the year ago period.
Quarterly revenue totaled US$38.4 million, up 92% from US$20.0 million in the same quarter last year.
Analysts polled by Thomson Reuters expected the company to report a loss of $0.07 per share on a revenue of $33.28 million for the quarter. Analysts' estimates typically exclude one-time items.
The company's unit shipments of baseband and RF semiconductors contributed the bulk of revenue at 295% year-over-year. Top-line contribution from baseband and RF semiconductors increased 103.7% to US$38.3 million from US$18.8 million as a result of rebounding demand on the back of improved product quality.
Gross profit for the quarter rose 71% to US$15.0 million, from US$8.7 million in the same quarter last year, while gross margin decreased to 39.0%,from 43.7% in the year ago period. The company recorded net interest income flat to US$0.5 million year-over-year.
Third quarter, operating expenses declined 67% to US$13.4 million from US$40.5 million in the year ago period, primarily due to expenses incurred in the year ago period of US$17.5 million related to impairment loss of long-lived assets and a US$6.6 million IPR&D expense, resulting from the Quorum acquisition and partially affected by US$1.3 million decrease in employee compensation expense.
For the nine-month period, Spreadtrum's net loss widened to US$25.8 million or US$0.59 per ADS from US$20.7 million or US$0.47 per ADS in the prior year. Year-to-date revenue increased to US$99.7 million from US$62.8 million last year.
Looking ahead, the company for the fourth quarter expects revenue to be in the range of US$37 - US$40 million. Analysts currently estimate revenue of $32.49 million for the fourth quarter.
SPRD closed Monday's regular trading at $6.00, up $0.60 or 11.11% on a volume of 1.54 million shares and in the after hours the stocks went up $0.50 or 8.33% at $6.50 on the Nasdaq
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