Cypress Semiconductor Corp. (San Jose, CA) reported a drop in its first-quarter earnings of 21.3% year-over-year to $200.3 million, which was also down 4.7% sequentially. The company posted a GAAP net loss of $65.1 million in the first quarter, which includes restructuring charges of $19.0 million.
First-quarter gross margin was 37%, flat compared to the previous quarter. The company said it managed its net inventory down again, amounting to $3 million in the first quarter. Revenue from the computation and consumer division was $66 million, up 12% from the fourth quarter of 2004, and accounted for 33% of Cypress' first-quarter revenue.
Revenue from the data communications division was $41.4 million, down 8% from fourth-quarter 2004, and accounted for 21% of Cypress' first-quarter revenue. The company does not expect a significant improvement in the data communications market during the second quarter. Revenue from the memory and imaging division was $74 million, down 16% from fourth-quarter 2004, accounting for 37% of the company's first-quarter revenue. Margins and revenue for the division are expected to improve in the sceond quarter.
"Our revenue for the 2005 first quarter came in at the bottom of the range we provided in guidance at the beginning of the quarter," stated Cypress President and CEO T.J. Rodgers. "However, we believe that the first quarter was the bottom of this current slowdown. We have started the second quarter with a better backlog position than last quarter's, and bookings to date are strong. Most of our revenue shortfall in the first quarter was the result of a decrease in sales of memory products to the wireless handset market, which experienced softness towards the end of the quarter."
