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Conexant Reduces Outlook

NEWPORT BEACH, Calif. — Conexant Systems, Inc. (NASDAQ: CNXT) today announced that it expects revenues for its March-ending second fiscal quarter to be lower than previously anticipated due to continuing weak demand and excess channel inventory. The company also announced aggressive expense-reduction initiatives and a comprehensive business reassessment focused on leveraging core capabilities and aligning resources with its highest-growth, highest-margin market opportunities.

Conexant now expects revenues for its second fiscal quarter to be down by approximately 35-40 percent from first fiscal quarter revenues of $410.4 million. Personal networking revenues are expected to be lower by approximately 25-30 percent sequentially due to continued deterioration in the digital cellular handset and set-top box markets. The company anticipates Internet infrastructure revenues will be down by approximately 45-50 percent sequentially, driven largely by a steep decline in its access product lines.

Based on the expected revenue level for the second fiscal quarter, the company anticipates a pro forma loss per diluted share of between $0.35 and $0.40, excluding the impact of one-time charges associated with expense-reduction initiatives, restructuring measures, and significant additional inventory reserves.

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