International Rectifier Corp. (IR) reported adjusted earnings of $26.5 million (or $0.37 per share) for the December quarter on revenues of $278.8 million. This compares to $29.4 million (or $0.41 per share) for the September quarter on revenues of $272.6 million. For the prior-year quarter, adjusted earnings were $44.8 million (or $0.62 per share) on revenues of $298.6 million. For the December 2005, September 2005 and December 2004 quarters, adjusted earnings excluded $3.1 million, $4.3 million and $6.8 million in pretax charges, respectively, for severance and restructuring activities announced in December 2002.
"Orders were up 17 percent over the prior quarter, supporting our decision to rapidly expand capacity," stated Alex Lidow, CEO. "During the quarter, we raised our inventory, loading the pipeline with raw materials and work-in-process. We are now just beginning to see the benefits of our accelerated efforts and expect significant revenue contribution throughout the calendar year."
"IR's orders accelerated significantly in the December quarter led by key end markets such as servers, appliances, digital TVs and game stations. With our increased capacity coming on-line to address our expanding backlog, we are well positioned to take full advantage of these opportunities in the year ahead," Lidow continued.
Computing & Communications (C&C) revenue was up 6 percent quarter-on-quarter. Energy-Saving Product (ESP) revenue grew 4 percent from the prior quarter. Aerospace & Defense (A&D) revenue was up 17 percent over the prior quarter In Non-Focus Products, revenue declined 10 percent from the September quarter. IR continued to manage its exposure to Commodity Products where revenue declined 6 percent sequentially. In Non-Aligned Products, a 16 percent decline in revenue was largely due to timing differences on program ramps.
On a GAAP basis, net income was $24.3 million (or $0.34 per share) for the December quarter versus $26.2 million (or $0.36 per share) in the September quarter and $39.5 million (or $0.55 per share) for the prior-year December quarter. The expense for stock-based compensation lowered both the adjusted and GAAP EPS for the December quarter by $0.01 per share.
Gross margin was 40.0 percent in the second quarter, down 70 basis points from 40.7 percent in the September quarter. The company had provided guidance of down 200 basis points for the December quarter. IR reported gross margin of 43.3 percent in the year-ago December quarter. Thirteen-week product backlog was $203 million at the end of the December quarter, up 9 percent sequentially.
