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Intersil Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 6, 2011 04:26PM
Intersil Corp. (ISIL) filed Quarterly Report for the period ended 2011-04-01. Intersil Corp. has a market cap of $1.86 billion; its shares were traded at around $14.93 with a P/E ratio of 17 and P/S ratio of 2.2. The dividend yield of Intersil Corp. stocks is 3.3%. Intersil Corp. had an annual average earning growth of 15.4% over the past 10 years.
Highlight of Business Operations:
Revenue for the quarter ended April 1, 2011 increased $9.5 million or 5.0% to $198.9 million from $189.4 million during the quarter ended April 2, 2010. The increase in sales was primarily in the industrial market, driven primarily by recent acquisitions, as well as a revenue increase in the consumer end markets, partially offset by a decline in the computing and communication end markets. Sales into the industrial and consumer end markets increased by 27% and 10%, respectively. Sales into the computing and communication end markets decreased by 9% and 2%, respectively, from the first quarter of 2010 due to a reduction in worldwide demand in our computing products.
In aggregate, an 8.6% increase in unit shipments increased net revenue from first quarter of 2010 levels by $16.2 million and average selling prices (ASPs) decreased 3.3%, decreasing revenues by $6.7 million. Declining sales prices at the product level has occurred within the semiconductor industry for much of its existence. While individual products generally experience ASP declines over time, we endeavor to continually introduce new products which typically enter the market at prices higher than existing products. Fluctuations in ASPs are expected to continue into the future.
We sell our products to customers in many countries including, in descending order by revenue dollars for our top ten countries, China (including Hong Kong), the United States, South Korea, Taiwan, Japan, Germany, Singapore, the Netherlands, Thailand, and Italy. Sales to customers in China, including Hong Kong, comprised approximately 54% of revenue, followed by the United States (13%) and South Korea (7%) during the quarter ended April 1, 2011. Three distributors that support a wide range of customers around the world accounted for 12%, 9% and 8% of our revenues in the quarter ended April 1, 2011. Two original design manufacturers accounted for 11% and 9% of our revenues for the quarter ended April 1, 2011.
Cost of revenue consists primarily of purchased materials and services, labor, overhead and depreciation associated with manufacturing pertaining to products sold. During the quarter ended April 1, 2011, gross profit increased $8.1 million or 7.6% to $115.0 million from $106.9 million during the quarter ended April 2, 2010. As a percentage of sales, gross margin was 57.8% during the quarter ended April 1, 2011 compared to 56.4% during the quarter ended April 2, 2010. The increase in gross margin was primarily due to growth in our higher margin industrial end market, higher utilization of resources as sales continue to grow and fluctuations caused by product sales mix changes at the product family level. Generally, our computing and high-end consumer products have lower gross margins than our industrial and communications products.
Income tax expense for the quarter ended April 1, 2011 was $3.2 million or 18.3% of income before taxes compared with $1.9 million or 6.5% of income before taxes for the quarter ended April 2, 2010. The quarter ended April 2, 2010 included a one-time discrete benefit resulting from the donation of our Fab facilities in Palm Bay, Florida. Excluding this item, the effective tax rate for the quarter ended April 1, 2011was slightly lower due to a greater portion of income in lower tax jurisdictions. Our tax rate is expected to be approximately 18%-20% in future quarters.
Stocks Discussed: ISIL,