SAN FRANCISCO—ON Semiconductor Corp. and Atmel Corp. Wednesday (May 2) became the latest chip makers to declare that the bottom of the semiconductor industry down cycle had passed, each reporting sales and profit that topped analysts' expectations.
"Our overall business stabilized in the first quarter of 2012 and we believe we have passed the bottom of the current semiconductor cycle," said Keith Jackson, ON Semi president and CEO, in a statement.
ON Semi (Phoenix) reported first quarter sales of $744.4 million, down 3 percent from the previous quarter and down 14 percent compared with the first quarter of 2011. The company reported a net income in accordance with generally accepted accounting principles (GAAP) of $28.2 million, or 6 cents per diluted share, for the first quarter, compared to a net loss of $8.8 million in the previous quarter and a GAAP net income of $35.5 million in the first quarter of 2011.
ON Semi's first quarter net income was dragged down by $29.3 million in restructuring charges and other special items, the company said.
On a non-GAAP basis, excluding charges, ON Semi report a net income of $57.5 million, or 12 cents per diluted share, down from $58.4 million, or 13 cents per diluted share, in the fourth quarter of 2011.
ON Semi's first quarter results exceeded consensus analysts' expectations, which called for sales of about $743 million and non-GAAP earnings of 9 cents per share, according to Yahoo Finance.
"Although sales were sequentially lower in the first quarter of 2012, through better mix management and effective cost control measures, we were able to maintain gross margins in-line with the fourth quarter of 2011," Jackson said.
ON Semi reduced internal inventories by about 1 percent and inventories in the distribution channel by about 14 percent during the first quarter, Jackson said.
"We enter the second quarter with distribution inventory dollars at the lowest levels since the third quarter of 2010," Jackson said. "We expect sequential revenue growth in the second quarter and start the quarter with higher backlog than when we started the first quarter."
For the second quarter, ON Semi said it expects sales to increase to between $745 million and $785 million, in line with analysts' expectations at the high end. Jackson said backlog levels represent about 80 to 85 percent of the company's anticipated second quarter sales. The company also expects average selling prices for the second quarter to be down 1 to 2 percent sequentially, Jackson said.
Atmel (San Jose, Calif.) reported first quarter sales of $357.8 million, down 7 percent from the fourth quarter of 2011 and down 22 percent from the first quarter of 2011. Atmel reported a GAAP net income for the quarter of $20.4 million, down 38 percent from the previous quarter and down 73 percent from the first quarter of 2011.
On a non-GAAP basis, excluding charges, Atmel reported a net income of $35.3 million, or 8 cents per diluted share. Non-GAAP net income was down from $67.5 million in the previous quarter and down from $122.2 million in the year-ago quarter.
Atmel's first quarter sales and non-GAAP net income exceeded consensus analysts' expectations of $352 million in sales and non-GAAP earnings of 4 cents per share, according to Yahoo Finance.
"As we predicted, our business bottomed during the first quarter, and we are well positioned to capitalize on the improving industry environment," said Steve Laub, Atmel's president and CEO, in a statement.
But Atmel said it expects sales to increase 2 to 6 percent sequentially in the second quarter, short of consensus analysts' expectations.