Spreadtrum Communications Q3 Profit Misses View, But Revenues Top

(RTTNews) - Fabless semiconductor company Spreadtrum Communications, Inc. (SPRD), which is being acquired by China's Tsinghua Unigroup Ltd., reported Monday a profit for the third quarter that increased 53 percent from last year, reflecting improved gross margin and strong double-digit revenue growth. Earnings per share for the quarter missed analysts' expectations by a penny, while quarterly revenues topped their estimates.

"In the third quarter we achieved a new record for revenue with growth in both single-core and dual-core chipsets for low cost smartphones. We further expanded our market reach with the launch of our WCDMA/HSPA+ smartphone chipset for the global market," Chairman and CEO Leo Li said in a statement.

The Shanghai, China-based company reported net income of $35.65 million or $0.64 per ADS for the third quarter, higher than $23.24 million or $0.44 per ADS in the prior-year quarter.

On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.65 per share for the quarter. Analysts' estimates typically exclude special items.

Excluding share-based compensation expenses, adjusted net income for the quarter was $41.19 million or $0.74 per ADS, compared to $29.32 million or $0.56 per ADS in the year-ago quarter.

Total revenue for the quarter surged 56.1 percent to a record $293.32 million from $187.87 million in the same quarter last year, and topped nine Wall Street analysts' consensus estimate of $257.44 million.

"We also began shipments of our quad-core smartphone chipset supporting both TD-SCDMA and WCDMA/HSPA+ to major handset makers, which is enabling us to serve higher value smartphone segments. In addition, our shipments of feature phone chipsets increased, and 100% of our feature phone chipsets now ship with integrated Bluetooth," LI added.

In the third quarter, smartphone products accounted for 73 percent of chipset revenues, and feature phone and other products accounted for 27 percent of chipset revenues.

Operating margin for the quarter remained flat with last year at 13.4 percent and gross margin improved 20 basis points.

SPRD closed Monday's regular trading session at $30.48, down $0.01 or 0.33% on a volume of 0.58 million shares. However, the stock gained $0.35 or 1.15% in after-hours trading.