Tom Sweeney

It's a coming of age tale….

Zarlink turnaround continues as revenue targets exceeded

Posted by sweens on July 29, 2010


Kanata-based Zarlink Semiconductor beat its revenue targets by 18 per cent year-over-year in first-quarter results announced on Thursday.

The firm’s revenues reached $58.7 million, which exceeded their earlier revenue guidance of between $57 million and $58.7 million.

Zarlink stated this was due to “increasing customer demand across all core segments of the business,” particularly in communications products, where revenue grew by $3.9 million, and medical products, up $1.3 million.

Basic earnings were at $0.08 per share and $0.07 per diluted share.

Zarlink earlier sold its optical-products unit, which generated net proceeds of $13.5 million.

The firm said it expects to see more demand for its next-generation carrier chipset products, which includes voice-over-broadband and new efficiencies in wireless to improve the speed.

Customers such as Ciena Corp. and Teias Networks have integrated Zarlink’s ClockCenter timing platform into their video products, allowing them to lower power consumption and simplify the design, Zarlink stated.

“Q1 was a very strong start to fiscal 2011,” stated president and chief executive Kirk Mandy.

“While capacity concerns are impacting the global semiconductor industry, we are working closely with our foundry partners to ensure we continue to meet delivery commitments as end-market demand for our products escalates.”

As part of its work beyond semiconductor, the company grew its medical revenues to $6.6 million, from $5.3 million in the fourth quarter of fiscal 2010.

The money came from shipments of wireless radio modules that were allowed for medical applications after approvals from the United States’ chief medical approvals body, the Food and Drug Administration.

However, year-over-year revenue fell from $9 million in Q1 2010 to the $6.6 million posted in Q1 2011.

Zarlink further made the following forecasts for Q2 2011:

– Revenue between $58.5 million and $60.5 million;

– Gross margins between 50 per cent and 51 per cent;

– Operating expenses between $20.5 million and $21.5 million, excluding amortization of intangibles;

– Q2 earnings of $0.03 to $0.05 per share, excluding foreign exchange fluctuations.

http://www.obj.ca/Technology/2010-07-29/article-1631108/UPDATE%3A-Zarlink-turnaround-continues-as-revenue-targets-exceeded/1

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