MACOM has reported a comparatively below-par financial result for the fiscal second quarter that ended March 29, 2019. The company recorded a revenue of $128.5 million, a decrease of 14.6% compared to $150.4 million in the previous year fiscal second quarter and a decrease of 14.7% compared to $150.7 million in the prior fiscal quarter. Update: Stocks on MACOM Jumped by 9% in 1 Day.
Speaking on the release of the report, John Croteau, the President and CEO of MACOM, accepted that the fiscal Q2 was a challenging quarter as the magnitude of the Data Center inventory correction had been deeper and more disruptive than the company originally anticipated. However, according to John, some customers are indicating they will be exiting the quarter at more normalized inventory levels, which is a leading indicator of a recovery in the second half of the year. Despite the temporary, albeit precipitous market correction in Data Centers, the fundamental demand drivers for each of MACOM’s growth opportunities remain intact with several potentially coming to fruition simultaneously.
John believes, MACOM’s recently announced joint venture with Goertek is a great example of a proactive solution to the challenge of seizing these windows of opportunity with a prudent OpEx model. The JV places the company in an even better position for success in 5G basestations, while defraying operating expenses, and at the same time, retaining substantial earnings power for the shareholders.
Here are the highlights from Second Quarter Fiscal Year 2019 GAAP Results
- Revenue was $128.5 million, a decrease of 14.6% compared to $150.4 million in the previous year fiscal second quarter and a decrease of 14.7% compared to $150.7 million in the prior fiscal quarter
- Gross profit was $57.3 million, a decrease of 12.6% compared to $65.6 million in the previous year fiscal second quarter and a decrease of 25.2% compared to $76.6 million in the prior fiscal quarter
- Gross margin was 44.6%, compared to 43.6% in the previous year fiscal second quarter and 50.8% in the prior fiscal quarter
- Operating loss was $30.2 million, compared to a loss of $23.4 million in the previous year fiscal second quarter and a loss of $14.4 million in the prior fiscal quarter
- Net loss from continuing operations was $46.2 million, or $0.71 loss per diluted share, compared to net loss of $15.5 million, or $0.50 loss per diluted share, in the previous year fiscal second quarter and net loss of $23.4 million, or $0.44 loss per diluted share, in the prior fiscal quarter
Highlights from the Second Quarter Fiscal Year 2019 Adjusted Non-GAAP Results
- Adjusted revenue, which excludes $7.0 million of revenue that was previously included as adjusted revenue in the fiscal third quarter of 2018, was $121.5 million, a decrease of 19.2% compared to $150.4 million in the previous year fiscal second quarter and a decrease of 19.4% compared to $150.7 million in the prior fiscal quarter
- Adjusted gross margin was 48.7%, compared to 51.6% in the previous year fiscal second quarter and 56.3% in the prior fiscal quarter
- Adjusted operating loss was $4.2 million, or 3.4% of revenue, compared to adjusted operating income of $15.7 million, or 10.5% of revenue, in the previous year fiscal second quarter and adjusted operating income of $21.9 million, or 14.5% of revenue, in the prior fiscal quarter
- Adjusted net loss was $11.6 million, or $0.18 loss per diluted share, compared to adjusted net income of $8.5 million, or $0.13 per diluted share, in the previous year fiscal second quarter and adjusted net income of $12.9 million, or $0.20 per diluted share, in the prior fiscal quarter
- Adjusted EBITDA was $3.4 million, compared to $23.4 million for the previous year fiscal second quarter and $29.5 million for the prior fiscal quarter
For the fiscal third quarter ending June 28, 2019, MACOM expects revenue to be in the range of $120 million to $124 million. Adjusted gross margin is expected to be between 53% and 55%, and adjusted loss per share is expected to be between $(0.08) and $(0.04) on an anticipated 66.5 million fully diluted shares outstanding.
