29 April 2010


AXT’s GaAs sales drive growth of 4.5% in Q1

For first-quarter 2010, AXT Inc of Fremont, CA, USA, which manufactures gallium arsenide, indium phosphide and germanium substrate and raw materials, has reported revenue of $18.6m, up 4.5% on $17.8m last quarter and more than double the $7.7m a year ago (which had halved from Q4/2008 during the severe dip in the industry in Q1/2009).

Compared to just $5m a year ago, total gallium arsenide (GaAs) substrate revenue was $13.4m, up 6% on $12.6m last quarter. Indium phosphide (InP) substrate revenue was $875,000, up on $513,000 last quarter and almost double the $490,000 a year ago. Although up on $622,000 a year ago, germanium (Ge) substrate revenue has fallen from $1.85m last quarter to $1.64m. Likewise, although almost double the $1.5m a year ago, raw materials sales have fallen slightly from $2.8m last quarter to $2.7m.

“We have continued to experience solid demand for our products across all of our primary markets, driven by significant and extended market trends, such as the rapid expansion of wireless devices and subscribers, the increasing momentum in the adoption of LED technology and the growing interest in solar energy,” says CEO Morris Young.

“Further, our own execution has been strong throughout our engineering, manufacturing, sales and administrative functions,” continues Young. “We have had tremendous success in continuing to develop our valuable, long-term customer relationships as well as penetrating new customers and new opportunities to drive our growth and diversify our base,” he adds.

Compared to –3.1% a year ago, gross margin has continued to recover, from 33.9% last quarter to 36.1%.

Operating expenses have risen to $3.9m from last quarter’s $3m (which included about $500,000 in one-time favorable year-end adjustments for professional fees, China pension funds and China union fees). However, this is still down on $5m a year ago (which included $629,000 severance and stock compensation accrual for former CEO Phil Yin and a $507,000 restructuring charge due to staff cuts).

Although down slightly from $2.8m last quarter, net income was $2.6m, compared with a loss of $5.5m a year ago.

“Our efforts to restructure and refocus our organization over the past nine months are resulting in tangible benefits in our efficiency, productivity and profitability — creating a solid foundation for our success in quarters to come,” comments Young.

For second-quarter 2010, AXT expects revenue to grow 11–15% to $20.7–21.5m.

See related items:

AXT’s Q4/2009 sales up year-on-year

AXT’s opto-related revenues to grow at 15-20% annually, forecasts analysts

AXT grows 28% as end markets continue recovery

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