Advertisement
YOU ARE HERE: LAT HomeCollections

California

Conexant Posts Quarterly Loss Amid Tough Telecom Market

January 24, 2003|Terril Yue Jones | Times Staff Writer

Chip maker Conexant Systems Inc. on Thursday reported a fiscal first-quarter loss of $52.2 million, or 20 cents a share, as the market for networking and telecommunications gear remained tough.

That compared with a loss of $204.5 million, or 80 cents a share, in the same quarter a year earlier, Newport Beach-based Conexant said.

Revenue rose to $164.5 million from $141 million a year earlier.

Broadband communications, by far the larger of Conexant's two product lines, recorded $144 million in revenue for the quarter ended Dec. 27 but just $536,000 in operating income.

"There was some seasonal growth: The fall season is a time when more PCs and peripherals and set-top boxes and game consoles are sold, and we sell chips into all of those," Chief Executive Dwight Decker said.

"But we also continued market share gains, in particular in some of our new product areas," such as high-speed digital subscriber lines, he said. "We think we're gaining share in a number of important areas such as set-top boxes for satellite applications like DirecTV and EchoStar."

Conexant's other busi- ness, Mindspeed Technolo- gies, which makes network- ing microprocessors, reported $20.2 million in revenue but showed an operating loss of $29 million for the quarter.

"That business had a $180-million [revenue] peak in the fourth quarter of 2000," Decker said. "It has suffered from the telecom industry collapse, as seen in companies like Lucent and Nortel."

Purchasing by network providers has yet to pick up again, and Mindspeed "is suffering from the worst telecom downturn in the history of telecommunications since the early 1900s," Decker said.

Conexant had been planning to spin off Mindspeed last year but postponed that because of the grim environment.

"That's always troubling when you have an operating loss that exceeds your total revenue significantly. That probably is the definition of 'troubled,' " said Ron Enderle, a technology analyst with Giga Information Group.

"The networking segment is under so much pressure, and we're not tracking anything that indicates there will be an uptick, particularly in the wired network," said Enderle, who does not own any Conexant stock.

Shares rose 8 cents to $1.74 on Nasdaq in regular trading before results were announced.

Advertisement
Los Angeles Times Articles
|
|
|