Intersil Q2 Revenue up Sequentially and YoY
Intersil Corporation announced financial results for the second quarter ended July 1, 2016. Second quarter revenue of $134.0 million was up 3.7% sequentially and 1.2% year-over-year. Both Consumer and Computing (C&C) and Industrial and Infrastructure (I&I) revenue were up year-over-year. I&I demand improved broadly, resulting in 7.8% sequential growth. Gross margin increased sequentially again to 59.4% on a GAAP basis. Planned closure of a portion of the company's manufacturing operations resulted in restructuring charges of $13.5 million, lowering GAAP operating margin and reducing GAAP earnings per share to $0.01
Revenue for the second quarter improved sequentially due to strength in the company's I&I products. Aerospace revenue achieved a recent record, while automotive revenue was near record levels in the quarter. Both I&I power and industrial analog were up again sequentially as a result of improving end market demand. Second quarter C&C revenue decreased 3.6% sequentially due to expected weakness in consumer demand, but was up 2% year-over-year.
"With year-over-year growth in both of our key businesses, we're encouraged with the progress in returning Intersil to a sustained growth path," said Necip Sayiner, president and CEO of Intersil. "An improving cost structure and strong gross margins are providing for good earnings leverage as we move closer to our long-term target operating model."
Second quarter GAAP results include the impact of the plan to decommission the company's 200 millimeter line at its Florida fab. As a result, second quarter GAAP results include $10 million for impairment of fixed assets and $3.5 million in severance and other restructuring charges. Second quarter GAAP gross margin was up again to 59.4%, a 60 basis point sequential increase. Total second quarter GAAP operating expenses increased to $77.1 million and included R&D expense of $34.2 million, SG&A expense of $25.2 million and other charges. GAAP operating income declined sequentially and year-over-year to $2.5 million, or 2 percent of revenue. Q2 GAAP net income was $1.4 million, resulting in earnings per share of $0.01.
The following forward-looking guidance is for the third quarter ending September 30, 2016, based on current business trends and conditions: Revenue $135 million to $105 million; Gross margins up 50 basis points; and Earnings per share of $0.11 to $0.13.