Broadcom, Conexant See Sales Soar

Two of Orange County’s technology titans, semiconductor makers Conexant Systems Inc. and Broadcom Corp., reported Wednesday that quarterly sales set records and that profits beat Wall Street’s expectations.

And beleaguered disk drive maker Western Digital Corp., mired in a two-year industrywide slump, said it continued to hemorrhage money.

Conexant, the Newport Beach-based chip maker that was spun off from Rockwell International last December, said its fiscal third-quarter net income leaped to $24.4 million, or 24 cents a share, from a $33.4-million loss a year earlier.

Analysts expected the company to report earnings of 16 cents a share, according to Thomson Investors Network.

Conexant’s revenue jumped 37%, to $380.3 million, from $277.8 million in the period ended June 30.

Dwight Decker, Conexant’s chief executive, told analysts that the company’s strong growth came from a combination of increasing sales, diversifying its product line and a 50% drop in expenses.

He noted that Conexant’s non-PC units--which include network access, digital infotainment, personal imaging and wireless communications--are growing at a 67% annual rate.

“We’re seeing record shipments and sequential growth that’s better than our competitors,” Decker said.

Conexant shares rose 5%, or $2.75, to $58 in Nasdaq trading. The company announced the results after the market’s close.

Irvine’s Broadcom, the industry’s leading maker of semiconductors for high-speed communications, reported that second-quarter earnings fell 43% even though its revenue more than doubled.

The company said profits dropped to $2.8 million, or 3 cents a share, from $4.9 million, or 5 cents, a year earlier. Broadcom officials blamed the downturn on onetime charges totaling $28.1 million, or 16 cents a share, stemming from lawsuit settlements and its recent string of acquisitions.

Broadcom took charges of $11.1 million, or 6 cents a share after tax, for its acquisition of three companies and $17 million, or 10 cents a share after tax, for the settlement of two lawsuits. Per-share earnings were based on 111.6 million shares outstanding in the 1999 second quarter and 101.2 million in the same year-earlier period.

Before the charges, Broadcom’s net income rose to $21.2 million, or 19 cents a share, beating analysts’ average forecast of 16 cents, according to a poll by First Call Corp.

Revenue in the period ended June 30 rose to $116.3 million, from $45.2 million.

Analysts said Broadcom benefited from increased demand for its digital set-top box chips, and semiconductors for cable modems and networking devices.

The acquisitions of Maverick Networks, Epigram Inc. and Armedia Inc. were completed May 31 and were not included in the second-quarter results.

Chief Executive Henry Nicholas III said each of the companies were losing money and were acquired for their technology. Revenue was driven “by existing products and new products,” Nicholas said.

Broadcom shares lost 75 cents, to $131.25, in Nasdaq trading. The company announced the results after the market’s close.

Western Digital, meanwhile, trimmed its fiscal fourth-quarter loss to $101.5 million, or $1.12 per share, from a $162.7-million deficit, or $1.84 cents a share, a year earlier. Sales in the period ended June 30 rose 9%, to $709.3 million from $650.5 million.

Excluding a $20-million restructuring charge for the sale of the company’s media business, Western Digital’s loss would have amounted to 90 cents per share, better than the 94 cents forecasted by financial analysts, according to First Call Corp.

The deficit reported Wednesday brings the company’s losses over the past seven quarters to $845.6 million.

For the year, Western Digital’s losses ballooned 70%, to a record $492.7 million, or $5.51 a share, from $290.2 million, or $3.32 a share, a year earlier. Annual revenue skidded 20%, to $2.8 billion, from $3.5 billion.

During a conference call with financial analysts, Western Digital officials pointed out that the company finished the quarter with $226 million in cash and hopes to finish the current quarter with $200 million.

Duston Williams, the company’s chief financial officer, said that Western Digital has the ability to raise $250 million to $300 million in cash during the upcoming fiscal year in part by selling its minority stakes in Komag Inc., Headway Technologies Inc. and Vixel Corp. Vixel last month announced plans to go public. Western Digital also has $150 million in financing available.

“Although we clearly understand that the operating losses must start to decline, this liquidity should provide us with a reasonable amount of cash for the next few quarters,” Williams said.

Western Digital’s losses come amid an industrywide downturn that has hit every manufacturer of computer disk drives, and the company had last month warned the financial community to expect further poor results.

The company hopes to improve its outlook by diversifying, including producing storage products for consumer electronics. On Tuesday, company officials said they expect revenue from audio-visual storage products by the end of the year.

Western Digital shares rose 13 cents, to $6.06, in New York Stock Exchange trading. The company announced the results after the market’s close.