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PMC-Sierra: Fiscal 1Q13 Financial Results

Storage, 68% of total revenue, down 6%

 (in US$ million) 1Q12  1Q13
 Revenues 132.1  125.2
 Growth    5%
 Net income (loss) (67.4) (6.8)

PMC-Sierra, Inc. reported results for the first quarter ended March 30, 2013.

Net revenues in the first quarter of 2013 totaled $125.2 million, a decrease of 3% compared to $129.4 million in the fourth quarter of 2012, and a decrease of 5% compared to $132.1 million in the first quarter of 2012.

GAAP net loss in the first quarter of 2013 totaled $6.8 million, or $0.03 per share, compared to GAAP net income in the fourth quarter of 2012 of $10.8 million, or $0.05 per diluted share. Note this GAAP comparative is restated for an immaterial correction described in the financial statements later in this release. Non-GAAP net income totaled $13.4 million, or $0.07 per diluted share, down 47% in the first quarter of 2013 compared to non-GAAP net income of $25.1 million, or $0.12 per diluted share in the fourth quarter of 2012.

"Our first quarter results were in line with our outlook and within the expected range," said Greg Lang, PMC president and CEO. "We are encouraged by stronger bookings in the quarter and expect to grow revenues in the second quarter of 2013. Our book-to-bill ratio within the period was greater than one for the second consecutive quarter."

Net income on a non-GAAP basis in 1Q13
excludes the following items:

  • $7.4 million stock-based compensation expense;
  • $10.8 million amortization of purchased intangible assets; and
  • $2 million of other adjustments including income tax related.

The company announced the following in 1Q13:

  • To meet the elastic traffic demands of big data, PMC announced the introduction of DIGI 120G, a single-chip OTN processor supporting 10G, 40G and 100G speeds for OTN transport, aggregation and switched deployments. It allows for the sharing and dynamic assignment of network resources, enabling OTN networks to virtualize optical network bandwidth. This level of silicon integration facilitates cost effective designs, engineering efficiency, and lowest power approach to OTN system solutions.
  • In secure data center storage solutions, PMC announced further expansion of its Adaptec storage product line with the high performance, high density, low profile encrypted PCIe Gen3 HBA family. This product line is capable of executing over one million IO/s with 6.6GB/sec sustained throughput, provides 256-bit AES encryption, and offers up to 16 ports. The Adaptec Series 7H and 6H families of SAS/SATA HBAs provide customers with performance connectivity for HDDs, SSDs, removable media and tape drives.

Comments

Abstracts of the earnings call transcript:

Greg Lang, president and CEO:

"Storage revenues were down 6%, a little more than what we expected but at the better end of typical seasonality. And at the top-level, the storage segment was 68% of total revenue, optical came in at 20% and mobile revenues came in at 13% of the total. For those of you tracking the legacy portion of our revenue, it was 7% of total revenue in Q1. We also expect about 7% in Q2.
"We expect Q2 revenues to be up 1% to 7% or in the range of $126.5 million to $134 million. Considering today's backlog, we believe that storage will be up sequentially, driven by large data center customers."


Steve Geiser, CFO:
"In Q1, we had two customers, which each accounted for more than 10% of our revenues, calculated on a rolling 12-month basis, namely, HP and EMC."

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