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Hittite Microwave Corp. Reports Operating Results (10-Q)

November 02, 2012 | About:
10qk

10qk

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Hittite Microwave Corp. (HITT) filed Quarterly Report for the period ended 2012-09-30.

Hittite Microwave Corporation has a market cap of $1.77 billion; its shares were traded at around $56.98 with a P/E ratio of 26.3 and P/S ratio of 6.7. Hittite Microwave Corporation had an annual average earning growth of 14.7% over the past 5 years.

Highlight of Business Operations:

Revenue. In the three months ended September 30, 2012, our revenue decreased $1.0 million, or 1.4%, to $67.2 million, compared with $68.1 million in the corresponding period of 2011. Revenue from sales to customers outside the United States accounted for 51.3% of our total revenue in the three months ended September 30, 2012, compared with 55.6% in the corresponding period of 2011. Our revenue decrease was primarily attributable to a $1.9 million decrease in sales to the microwave and millimeterwave communications market, a $1.4 million decrease in sales to the cellular market and a $1.3 million decrease in sales to the military market, which were partially offset by a $2.5 million increase in sales to the space market and a $1.0 million increase in sales to the test and measurement market. The decrease in sales to the microwave and millimeterwave communications and cellular markets reflects weaker demand for our products used in infrastructure projects by our telecommunications customers. The decrease in sales to the military market primarily relates to our completion of a systems contract in 2011, as well as lower pricing on certain military programs partially offset by increased volume. We believe that the growth in sales to the test and measurement and space markets reflects increased market share due to the broader range of our product offerings and increased market acceptance of products we introduced in prior years.

Research and development expense. In the three months ended September 30, 2012, our research and development expense increased $3.4 million, or 37.8%, to $12.5 million, and represented 18.7% of our revenue, compared with $9.1 million, or 13.4% of our revenue, in the corresponding period of 2011. The increase in our research and development expense was primarily attributable to a $0.9 million increase in professional fees, a $0.8 million reduction in funding received from various foreign government research and development incentive programs, a $0.5 million increase in personnel costs, a $0.5 million increase in supplies and materials, a $0.4 million increase in equipment costs and a $0.3 million increase in other costs. The increase in costs was primarily due to the growth of our engineering organization, including the opening of our new design centers in Virginia and Egypt in the fourth quarter of 2011, and costs of translation of certain existing products to other GaAs foundries.

Sales and marketing expense. In the three months ended September 30, 2012, our sales and marketing expense increased $0.6 million, or 10.9%, to $6.0 million, and represented 9.0% of our revenue, compared with $5.4 million, or 8.0% of our revenue, in the corresponding period of 2011. The increase in our sales and marketing expense was primarily attributable to a $0.7 million increase in personnel costs and a $0.1 million increase in travel costs partially offset by a $0.2 million decrease in commissions and other costs.

Revenue. In the nine months ended September 30, 2012, our revenue decreased $8.0 million, or 3.9%, to $195.9 million, compared with $203.9 million in the corresponding period of 2011. Revenue from sales to customers outside the United States accounted for 51.9% of our total revenue in the nine months ended September 30, 2012, compared with 55.1% in the corresponding period of 2011. Our revenue decrease was primarily attributable to a $7.7 million decrease in sales to the cellular market, a $5.3 million decrease in sales to the military market and a $4.5 million decrease in sales to the microwave and millimeterwave communications market, which were partially offset by a $5.5 million increase in sales to the test and measurement market and a $4.2 million increase in sales to the space market. The decrease in sales to the cellular and microwave and millimeterwave communications markets reflects weaker demand for our products used in infrastructure projects by our telecommunications customers. The decrease in sales to the military market reflects our completion of a systems contract in 2011, as well as lower pricing on certain military programs, partially offset by increased volume. We believe that the growth in sales to the test and measurement and space markets reflects increased market share due to the broader range of our product offerings and increased market acceptance of products we introduced in prior years.

Research and development expense. In the nine months ended September 30, 2012, our research and development expense increased $8.9 million, or 31.7%, to $36.8 million, and represented 18.8% of our revenue, compared with $27.9 million, or 13.7% of our revenue, in the corresponding period of 2011. The increase in our research and development expense was primarily attributable to a $2.6 million increase in personnel costs, a $1.8 million increase in supplies and materials, a $1.3 million increase in professional fees, a $1.2 million increase in equipment costs, a $0.9 million reduction in funding received from various foreign government research and development incentive programs, a $0.4 million increase in depreciation and a $0.7 million increase in occupancy and other costs. The increase in costs was primarily due to the growth of our engineering organization, including the opening of our new design centers in Virginia and Egypt in the fourth quarter of 2011, and the costs of translation of certain existing products to other GaAs foundries.

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