Agere on a "good financial footing"

Agere Systems has reported a GAAP net income of $74 million or $0.04 per share for the second quarter of fiscal 2004, compared with the year-ago net loss of $125 million or $0.08 per share.

Agere Systems has reported a GAAP net income of $74 million or $0.04 per share for the second quarter of fiscal 2004, compared with the year-ago net loss of $125 million or $0.08 per share, and the December quarter net loss of $39 million, or $0.02 per share.

The company reported a pro forma net income of $83 million, or $0.05 per share, compared with a pro forma net loss of $105 million, or $0.06 per share in the year-ago quarter, and a pro forma net income of $22 million, or $0.01 per share in the December quarter.

Both GAAP and pro forma earnings in the March quarter included a tax benefit of $82 million, which the company noted in its earnings update on 17th March.

Pro forma net income excludes gain or loss from the sale of, and income or loss from, discontinued operations; net restructuring and other charges; purchased in-process research and development charges related to acquisitions; amortisation of acquired intangible assets; net gain or loss from the sale of operating assets and cumulative effect of an accounting change.

The company's revenues were $462 million, up 4% over the year-ago quarter, and down 10% sequentially.

The sequential decline was due primarily to the forecasted decrease in sales of 3G chipsets for mobile phones related to delays in 3G deployment.

The company's revenues were slightly lower than the guidance provided in March due to lower-than-expected intellectual property licensing revenues.

The company's infrastructure systems business reported revenues of $128 million, an increase over the year-ago quarter and up 8% sequentially, driven by growth across the business in wireless, wireline and enterprise applications.

The company's client systems business reported revenues of $334 million, up 6% over the year-ago quarter, and down 16% sequentially, due primarily to the decrease in sales of 3G chipsets for mobile phones in the quarter.

The company reported its third consecutive quarter of positive cash flow from operations, less capital expenditures, generating $28 million in the March quarter.

The company reduced its total debt by $39 million sequentially, while also improving cash and cash in trust by $7 million to $779 million.

"We are entering the second half of our fiscal year on a good financial footing: both our segments are profitable, the company is cash flow positive and we are continuing to improve our gross margin percentage", said John Dickson, President and CEO, Agere Systems.

"We are also pleased with the turnaround in our Infrastructure segment, which is seeing revenue growth across the business".

"While delays in 3G mobile phone deployment impacted our overall March quarter revenues, we saw strong growth in sales of 2.5G chipsets to all of our customers, and fully expect 3G revenues to increase in the June quarter", added Dickson.

"As we look beyond the June quarter, we are confident that we will be able to deliver revenue momentum by executing on the highest-growth opportunities: chips for data-capable mobile phones, consumer electronics disk drives, wireless and broadband access, and Gigabit Ethernet networking".

In the June quarter, the company expects to report revenues in the range of $495 million to $505 million, with sequential growth in both the infrastructure systems and the client systems business segments.

The company expects both GAAP and pro forma earnings to be in the range of breakeven to $0.01 per share.

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