thomasj,
Hey buddy.
FYI from a bud!
INTERVIEW-Conexant sees shift into digital gear
Reuters Story - January 04, 1999 16:44
By Andrew Hay
NEW YORK, Jan 4 (Reuters) - Diversified semiconductor chip maker Conexant Systems Inc. expects to generate three quarters of its business from new digital technologies by 2001 and achieve profitability during the second half of 1999, the company said Monday.
Conexant, the leading communications chips maker spun off by Rockwell International Corp. , currently gets around half its business from selling semiconductors for analog personal computer modems.
With intense pricing pressure in the PC modem sector, and a market shift away from older analog technology, Conexant is developing chips for Internet communications and digital telephones, cameras and printers, Conexant Chief Executive and Chairman Dwight Decker told Reuters.
"We see the PC business declining and then the revenues from these expansion platforms growing," Decker said in a telephone interview from the Nasdaq stock exchange. "In fiscal year 2001 we expect to have our business fully diversified."
Conexant stock closed at 18-13/16 Monday, up 11/16 from an open of 17-1/8, after its first day trading on the Nasdaq.
Conexant expects to post an after-tax operating loss of around $50 million for its 1999 first quarter.
Analysts expect the company to post losses for the first three quarters of 1999 and report a profit of $0.02 per share during the fourth quarter, according to research firm First Call, which charts such estimates.
"We expect to turn to profitability in the the second half of calendar '99," Decker said. He declined further comment on the company's financial outlook.
In 1998, Conexant posted $1.2 billion in revenues, 55 percent of which came from PC modem sales. The company sees more than 60 percent of its 1999 revenues coming from its new network and wireless businesses. Decker, previously president of Rockwell Semiconductor Systems, sees that figure rising to about 75 percent in 2001.
Conexant's PC modem business is expected to grow at 15 percent a year in unit sales. But with intense pricing pressure the company sees 25 percent price reductions per year and a decline in revenues for the next four to six quarters.
The company said it was spending three times more on research and development for its network and wireless division than for its personal computer division. Conexant expects revenues growth of between 25 and 30 percent per year if market conditions continue to be favorable toward its new products.
Conexant holds largest share of the PC modem market, its nearest competitor being Lucent Technologies Inc. .
In the broader networking and wireless business, the company also holds the leading market share and faces competition from companies such as Broadcom Corp. , Level One Communications Inc. and Vitesse Semiconductor Corp.
Last year, Rockwell, which makes automation and avionics products, said it planned to spin off its volatile semiconductor unit in a move to consolidate and stabilize the company.
Your buddy,
Jay
FWIW
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