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SigmaTel expects Q1 revenue of up to Rs.155 crore

Posted: 31 Mar 2006     Print Version  Bookmark and Share

Keywords:SigmaTel  revenue  portable multimedia SoCs  NAND flash 

SigmaTel Inc. announced that it expects revenue for the quarter ending March 31 to be in the range of Rs.132.75 crore ($30 million) to Rs.154.88 crore ($35 million). Gross margins will be approximately 49 per cent, plus or minus a percentage point for the quarter, which is lower than previously expected.

Based on the revisions, both GAAP and pro forma net loss and loss per share will be considerably lower than the previous guidance, said SigmaTel. Contributing to the lower income is a negative impact on the company's non-cash deferred income taxes, due to its international tax and IP migration strategy. This negative impact could be approximately Rs.22.13 (50 cents) per share.

"Several factors have negatively impacted the company's results for the first quarter. First, one of our large customers' transition from the 3500 family to the 3600 family of portable multimedia SoCs proceeded more slowly than expected, causing the customer's 3600 orders to slip to the second quarter," reported Ron Edgerton, SigmaTel's president and CEO.

Another factor was the market's slower-than-expected adoption of the STFM 1000 which was due to firmware issues and delays in reference designs. Consequently, the company's FM Tuner bundling strategy, which is being used to compete in the fiercely competitive low end of the market, was hampered. Finally, the availability of a complete hardware and firmware solution for the public casings customers created order delays. The company believes that it is successfully addressing these factors.

Another significant market factor affecting the company's performance was the precipitous declines in NAND flash prices. SigmaTel believes these declines caused OEMs to postpone orders from suppliers, resulting in lower than expected customer orders for its portable multimedia SoCs in Q1 2006.

Reports of independent industry experts indicate that 2Gbit NAND spot and contract prices have dropped over 40 per cent since the beginning of the year. "The NAND pricing instability only exacerbates the typical seasonality for the MP3 market and customers have postponed ordering product until they have worked through their higher-priced inventory and NAND prices have stabilized," said Edgerton.




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