Agere sticks with growth strategy

Agere Systems reports that revenues for the fourth quarter of fiscal 2004, ended 30th September 2004 were $439 million, at the high end of the guidance range provided by the company in July.

Agere Systems reports that revenues for the fourth quarter of fiscal 2004, ended 30th September 2004 were $439 million, at the high end of the guidance range provided by the company in July.

The company's revenues were $495 million in the June quarter and $504 million in the year-ago quarter.

For the full fiscal year 2004, the company reported revenues of $1.91 billion, an increase of 4 percent over revenues of $1.84 billion for fiscal year 2003.

For the September quarter, the company reported a GAAP net loss of $127 million or $0.07 per share, including $132 million in net restructuring and other charges.

The company reported a GAAP net income of $2 million or breakeven per share in the June quarter, and a GAAP net income of $11 million or $0.01 per share in the year-ago quarter.

Pro forma net income was $6 million or breakeven per share in the September quarter, compared with pro forma net income of $10 million, or $0.01 per share in the June quarter, and pro forma net income of $64 million or $0.04 per share in the year-ago quarter.

For the full fiscal year 2004, the company reported a GAAP net loss of $90 million, or $0.05 per share, compared with a GAAP net loss of $338 million, or $0.20 per share in fiscal 2003.

The company reported pro forma net income of $49 million, or $0.03 per share, compared with pro forma net loss of $148 million, or $0.09 per share in fiscal 2003.

Pro forma net income excludes gain or loss from the sale of, and income or loss from, discontinued operations; restructuring-related charges included in costs, primarily increased depreciation; certain other non-cash charges; net restructuring and other charges; purchased in-process research and development charges; amortization of acquired intangible assets; net gain or loss from the sale of operating assets; certain tax adjustments; cumulative effect of an accounting change and certain non-recurring charges.

The company reported gross margin of 45% for the fiscal year 2004, an improvement of 14 percentage points over fiscal year 2003 gross margin of 31%.

The company posted its fifth consecutive quarter of positive cash flow from operations, less capital expenditures, generating $13 million in cash in the September quarter.

The company also improved its cash and cash in trust by $12 million to $797 million.

"We are encouraged by the progress we have made over the last year: we increased revenues and gross margin, improved our bottom-line performance, and strengthened our cash position", said John Dickson, President and CEO, Agere Systems.

"While the market remains somewhat uncertain, we are confident that we have the growth strategy in place to take advantage of the opportunities ahead".

"We expect to continue to build on our success in storage; expand our footprint in mobility from 2.5G/Edge to 3G and multimedia solutions; leverage our traffic management and network processor expertise to deliver multiservice and voice-over-IP solutions; and aggressively pursue such growth areas as Gigabit Ethernet and home and enterprise storage networks".

"We believe that the actions we have taken to reduce costs and sharpen product focus will allow us to increase our revenues and improve profitability as we move through fiscal 2005".

In the December quarter, the company expects to report revenues in the range of $390 million to $410 million, consistent with the company's outlook in September.

The company expects GAAP net loss to be in the range of $0.04 to $0.06 per share, including restructuring-related items.

Pro forma net loss is expected to be in the range of $0.01 to $0.03 per share.

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