Wednesday, analog integrated circuit maker Intersil Corp. (ISIL), announced a decline in profit for the third quarter on lower revenues, hurt by realization of a loss on auction rate securities. Looking ahead, the company provided earnings and revenue guidance for the fourth quarter.
The Milpitas, California- based company's net income declined to $12.3 million or $0.10 per share from $47.3 million or $0.38 per share in the same quarter last year.
On average, seventeen analysts polled by Thomson Reuters expected the company to earn $0.10 per share in the third quarter. Analysts' estimates typically exclude on-time items.
Net income for the quarter included a $14.3 million unrealized loss on long term auction rate securities and approximately $9.7 million in related tax benefits.
Net revenues for the third quarter declined 23% to $168.3 million from $218.7 million reported in the comparable period last year. Revenues came in ahead Street expectations of $161.83 million for the third quarter.
Though direct expenses declined to $73.5 million from $95.6 million, lower revenues pushed gross margins down to 54.5% from 56.3% in the same quarter last year.
Third quarter operating margins declined to 10.4%, compared with 22.9% in the prior-year period, fueled by higher indirect expenses, led by a $3.3 million increase in research and development costs.
At the end of the third quarter, Intersil's cash and short-term investments totaled over $329 million with no debt. Free cash flow was $32.6 million during the third quarter.
Dave Bell, Intersil's President and chief executive officer said "During the quarter, we completed the acquisition of Quellan, which exemplifies our strategy to expand our presence in high-margin communications infrastructure markets"
For the nine months period, the company recorded net income of $20.9 million or $0.17 per share, down from $152.4 million or $1.23 per share reported last year. Revenues declined to $433.7 million from $638.6 million in the same nine-month period last year.
In its outlook for the fourth quarter, Intersil expects GAAP earnings in the range of $0.14 to $0.17 per share, revenues in the range of $170 million to $177 million. Analysts currently expect the company to post earnings of $0.13 per share for the fourth quarter on revenues of $168.13 million.
The company declared a quarterly dividend of $0.12 per share of common stock. The payment of this dividend will be made on November 20, 2009 to shareholders of record as of the close of business on November 10, 2009, according to the company.
ISIL finished Wednesday's regular trade at $13.9, up $0.03, on a volume of 5.7 million shares on the Nasdaq.
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