TriQuint Semiconductor Inc. reported strong third quarter sales and profit growth but investors sharply drove down the chipmaker’s market value on concerns the outlook it provided points to lackluster performance in the fourth quarter and possibly in the next several quarters.
In heavy trading on Thursday, Oct. 24, investors lopped off more than 10 percent from the company’s market value, one day after it announced net income of $13.6 million, or 8 cents per share, for the third quarter ended Sept. 28, compared with a net loss of $14.9 million, or 9 cents per share, in the year-ago quarter. Third quarter revenue rose 32 percent to $250.8 million from $190.1 million and gross profit margin increased strongly to 38 percent from 31.3 percent.
With such a strong performance and expectations for both sequential and year-over-year improvements in the fourth quarter, why were investors so negative on the company’s future prospects? Blame it on BlackBerry Ltd., the embattled Canadian smartphone manufacturer that once accounted for a huge chunk of TriQuint’s revenue, according to president and CEO Ralph Quinsey.
“Like some of our other friends in the business we do see some decline with the BlackBerry business,” Quincy said during a conference call with analysts. “If you look at any particular quarter they have been in our top three or four customers this year and now they have really fallen off the map.”
TriQuint in a statement said fourth quarter sales will “be between $260 million and $270 million” below analysts’ consensus estimate of $280.5 million, according to a Reuters report. The predicted fourth quarter revenue number would still represent a strong improvement on the $233.62 million the company posted for the December 2012 quarter.