Power Integrations Reports Revenue and Net Income Increases in Q3
Power Integrations has announced financial results for the quarter ended September 30, 2019. Net revenues for the third quarter were $114.2 million, up 11 percent from the prior quarter and up four percent from the third quarter of 2018. Net income was $17.1 million or $0.57 per diluted share compared to $0.37 per share in the prior quarter and $0.59 in the third quarter of 2018. Cash flow from operations was $21.8 million for the third quarter.
In addition to its GAAP results, the company provided certain non-GAAP measures that exclude stock-based compensation, amortization of acquisition-related intangible assets and the tax effects of these items. Non-GAAP net income for the third quarter of 2019 was $23.3 million or $0.78 per diluted share, compared with $0.56 per diluted share in the prior quarter and $0.77 per diluted share in the third quarter of 2018. A reconciliation of GAAP to non-GAAP financial results appears at the end of this press release.
The company announced a settlement of its patent disputes with ON Semiconductor, ending all litigation between the companies. Power Integrations has received a payment of $175M from ON; neither company granted any licenses to the other. The company expects to recognize a gain in its financial results for the fourth quarter of 2019.
Power Integrations paid a dividend of $0.17 per share on September 30, 2019. The company’s board of directors has increased the quarterly dividend to $0.19 per share starting in the fourth quarter of 2019; the next dividend of $0.19 will be paid on December 31, 2019 to stockholders of record as of November 29, 2019.
Commented Balu Balakrishnan, president and CEO of Power Integrations: “We returned to year-over-year revenue growth in the third quarter driven by strength in our communications category, reflecting accelerated adoption of fast chargers for smartphones. Our InnoSwitch™ ICs, including our new higher-power devices with GaN switches, are winning in the market thanks to their industry-leading combination of efficiency and integration. Looking ahead, while trade issues and weaker macroeconomic conditions continue to weigh on demand, we expect strong year-over-year growth in the fourth quarter.”
Mr. Balakrishnan continued: “The settlement of our litigation with ON Semiconductor is a landmark win for our company, demonstrating the durability and the value of our intellectual property, as well as our determination to protect it from unlawful use by competitors.”
- The company issued the following forecast (excluding the impact of the litigation settlement) for the fourth quarter of 2019:
- Revenues are expected to be $114 million plus or minus $3 million.
- GAAP gross margin is expected to be approximately 51.5 percent. Non-GAAP gross margin is expected to be approximately 52.5 percent. (The difference between the expected GAAP and non-GAAP gross margins is composed of approximately 0.7 percentage points from amortization of acquisition-related intangible assets and 0.3 percentage points from stock-based compensation.)
- GAAP operating expenses are expected to be between $42 million and $42.5 million; non-GAAP operating expenses are expected to be between $36 million and $36.5 million. (Non-GAAP expenses are expected to exclude approximately $5.6 million of stock-based compensation and $0.4 million of amortization of acquisition-related intangible assets.)