Agere Systems Inc. (Allentown, PA) reported that revenues for the third quarter of fiscal 2005, ended June 30, 2005, were $433 million, at the high end of the guidance range provided by the company in April. The company's revenues have grown from $417 million in the March quarter and $410 million in the December quarter.
The company reported GAAP gross profit of $185 million, or 43 percent of revenue; GAAP operating income of $3 million, or one percent of revenue; and GAAP net income of $120 million, or $0.66 per share. GAAP net income includes a $120 million benefit resulting from the reversal of a tax contingency and $38 million in restructuring related costs included in gross profit – primarily additional depreciation related to the planned closure of the company's Orlando facility. It also includes $8 million in net restructuring and other non-recurring charges, $1 million of amortization of acquired intangible assets, and a $4 million gain on the sale of operating assets.
In the March quarter, Agere reported GAAP gross margins of 37 percent; a GAAP operating loss of $79 million; and a GAAP net loss of $68 million, or $0.38 per share. The GAAP net loss in the March quarter included purchased in-process research and development charges of $55 million related, $33 million in net restructuring charges and related costs, and a $22 million benefit resulting from the reversal of a tax contingency. All per-share amounts reflect the 1-for-10 reverse stock split and share reclassification that the company completed on May 27, 2005.
On a pro-forma basis, the company exceeded its long-term operating model in the June quarter by achieving a pro-forma gross margin of 52 percent. In addition, pro-forma operating income was $46 million, or 11 percent of revenue, and pro-forma net income was $43 million, or $0.24 per share, which is equal to 10 percent of revenue. In the March quarter, the company reported a pro-forma gross margin of 44 percent; pro-forma operating income of $10 million; and a pro-forma net loss of $1 million, or breakeven per share.
In addition, Agere is announcing plans to complete the closure of its Orlando wafer fabrication facility by September 30, 2005. Previously, the company had announced its intention to close the facility by December 31, 2005, as part of its business restructuring measures. At present, 545 employees work in the facility.
"Our results this quarter are a significant step toward achieving our operating model goals as we achieved a quarterly pro-forma gross margin of 52 percent and operating income margin of 11 percent," said Agere Systems President and CEO John Dickson. "The closure of our facility in Orlando represents the last major step in the restructuring efforts we have undertaken."
