Earnings Press Release-- does not note sequential quarterly decline in net sales, gross profit, operating income, EPS
Press Release Source: UTStarcom, Inc.
UTStarcom Reports Record First Quarter Results
Tuesday April 27, 4:06 pm ET
- Exceeds Revenue and Profit Expectations
- First Quarter 2004 Revenues of $622.3 Million, an Increase of 88 Percent Year-Over-Year
- First Quarter 2004 GAAP Earnings of $54.8 Million, or $0.40 Per Share, an Increase in Net Income of 47 percent Year-Over-Year
- Record Q1 Cash Collections of Over $500 Million
biz.yahoo.com
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Reuters
UPDATE - UTStarcom qtrly sales surge; sees $3.5 bln in 2005
Tuesday April 27, 5:09 pm ET
By Eric Auchard
(Updates with analyst comment, share price drop, CEO comments)
NEW YORK, April 27 (Reuters) - UTStarcom Inc. (NasdaqNM:UTSI - News), an emerging markets network gear maker, on Tuesday posted a 47 percent rise in quarterly profit on better-than-expected Chinese sales and boosted its outlook for 2004 and 2005.
But shares fell about 5 percent following the report due to concerns that second-quarter profits will be shy of forecasts.
"UTStarcom doesn't get the credit for the upside to revenue numbers," Pacific Growth Equities analyst Joe Noel said of the stock drop. "What's causing concern is the deterioration in the margins that appears to be hitting the bottom line."
Alameda, California-based UTStarcom said it expects revenue of more than $3.5 billion during 2005, which no analyst had forecast would happen until after 2006. More than $1.2 billion in revenue will come from outside China, it added.
First-quarter net profit rose to $54.8 million, or 40 cents a diluted share, from $37.3 million, or 33 cents, a year ago.
The latest results compared with a consensus estimate of 39 cents per share by analysts surveyed by Reuters Research.
Net sales rose 88 percent, to $622.29 million from $330.52 million posted during the first quarter of 2003. Sales estimates had ranged from $570 million to $604 million.
UTStarcom, a company founded by two Chinese immigrant entrepreneurs in the United States, supplies the best-selling phones in China, which run on a low-cost alternative wireless technology called PAS that is popular with urban immigrants. It held onto more than 60 percent of the China PAS market.
"We believe no one has shipped more telephone handsets in China, including Nokia (NOK1V.HE) and Motorola Inc. (NYSE:MOT - News)," Chief Executive Hong Lu told investors in a conference call that followed the report.
UTStarcom said it now expects 2004 net sales of $2.75 billion, up from the $2.7 billion it had previously predicted. It forecast earnings per share for 2004 of $1.85, including 10 cents of dilution during the second and third quarters from two recent deals.
Wall Street estimates call for 2004 full-year revenue, on average, of $2.59 billion and for 2005 revenue of $3.04 billion, according to a survey by Reuters Research.
The company said it expects 33 cents per share, including 7 cents of dilution tied to two recent acquisitions, or 40 cents excluding merger-related effects. This compared with 42 cents forecast, on average, by 19 financial analysts.
Lu said the company was managing its performance based on sales, profits and cash-flow growth, not according to profit margins, which will fluctuate. Chief Financial Officer Mike Sophie said profit margins would bounce back later in 2004.
UTStarcom's bullish forecast reflects its inside sales track in some of the world's biggest emerging markets for communications network gear -- in China, Japan, India -- and, increasingly, in the Americas, Europe and Africa.
The booming growth forecasts are also meant to confront head on any lingering doubts about the company's early success in China -- a fast-growing market but also a potentially unstable one -- and its dependence on a maturing product line.
UTStarcom is focused on supplying phones and data to the 4 billion people without access to modern communications.
Shares of UTStarcom fell to $29.00 after the report from a close of $30.42.
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