MANHASSET, N.Y. Communications semiconductor supplier Conexant Systems Inc. reported a net loss of $73.2 million, or 16 cents per share on sales of $169.7 million in its second 2005 fiscal quarter ended March, compared to $120.7 million, or 26 cents per share on sales of $140.6 million in the previous fiscal quarter.
Conexant (Newport Beach, Calif.) exceeded its previous guidance calling for revenue of $160 million. The company said it completed an inventory reduction initiative in the quarter, though was forced to lower prices on some parts, thus lowering gross margin.
The inventory problems, which surfaced last year, caused shareholders to file a class-action suit in December, alleging Conexant failed to fully inform them about the extent of its inventory issues.
"From a broader perspective, by quickly returning inventory to normalized levels, we successfully executed on the first phase of our three-stage recovery plan," said Dwight Decker, Conexant's chairman and chief executive, in a statement. "We are now focused on the second phase of this plan, which is to grow revenue, complete in-process cost reductions, and achieve profitability before the end of the calendar year."
By the year's end, Decker hopes to achieve gross margin of 40 percent compared to 35.3 percent in the March quarter, and targeted revenue of $220 million.
For the third fiscal 2005 quarter, Conexant projects revenue of $190 million.