ANADIGICS Earnings: Shrinking Margins for Fifth Consecutive Quarter

ANADIGICS, Inc. (NASDAQ:ANAD) reported its results for the third quarter. Anadigics is a provider of semiconductor solutions in the growing broadband wireless and wireline communications markets.

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ANADIGICS, Inc. Earnings Cheat Sheet

Results: Loss widened to $17 million (24 cents per diluted share) from $10 million (loss of 15 cents per share) in the same quarter a year earlier.

Revenue: Fell 23.1% to $28.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: ANADIGICS, Inc. beat the mean analyst estimate of a loss of 27 cents per share. Analysts were expecting revenue of $28.6 million.

Quoting Management: “We are pleased to report significant progress in the third quarter as revenue from the ramping of new products exceeded declines in legacy products, resulting in sequential revenue growth of 14 percent,” said Ron Michels, president & CEO of ANADIGICS. “These results serve as evidence that our growth initiatives are beginning to take hold as we maintain our focus on introducing innovative products and expanding our served available markets. With a robust product development pipeline, strong design win activity and outstanding manufacturing prowess, we believe that ANADIGICS is well positioned for continued revenue growth and gross margin improvement.””The $2.6 million sequential improvement in our non-GAAP results demonstrates the leverage of the revenue increase and lower operating costs,” said Terry Gallagher, vice president and CFO. “Looking to the fourth quarter, we expect our financial performance to benefit from continued growth in wireless.”

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 19.5 percentage points to -0.6% from the year-earlier quarter. In that span, margins have contracted an average of 21.7 percentage points per quarter on a year-over-year basis.

Revenue has fallen for the last four quarters. Revenue declined 29.5% to $25.1 million in the second quarter. The figure fell 34.6% in the first quarter from the year earlier and dropped 39.4% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company beat estimates last quarter after falling short in the previous two quarters. In the second quarter, it missed the mark by 5 cents, and in the first quarter, it came in under estimates by 3 cents.

Looking Forward: Analysts seem more negative about the company’s results for the next quarter than ninety days ago. The average estimate for the fourth quarter has moved from a loss of 19 cents a share to a loss of 23 cents over the last ninety days. The average estimate for the fiscal year has reached a loss of $1.01 per share, down from a loss of 85 cents ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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