Orange County Business Journal

Mindspeed Reports Mixed Results

Chris Casacchia Tuesday, July 24, 2012

Newport Beach-based networking chipmaker Mindspeed Technologies Inc. on Monday reported mixed results for the June quarter.

The company posted revenue of $35.5 million, down 71% from a year earlier and in line with Wall Street expectations.

Mindspeed reported a loss of nearly $5 million in the recently ended quarter, compared with an adjusted profit of $2.5 million a year ago.

Analysts on average had forecast a loss in the June quarter of $6.1 million.

The company plans to cut more than 80 jobs as part of a restructuring plan to lower costs, Chief Executive Raouf Halim said during Monday's conference call with analysts.

The cuts will be spread evenly between research and development, sales and administrative personnel, Halim said.

That will save the company about $13 million per year and bring companywide employment to about 500.

The Business Journal in May reported Mindspeed cut about 25 employees following January’s acquisition of U.K.-based Picochip Ltd. for $51.8 million and up to $25 million in additional benchmark payments.

Mindspeed also said it hired Chicago-based executive search firm Heidrick & Struggles to conduct the search for an independent director to join the board.

The company provided some guidance for the current quarter.

It said revenue is projected to be flat to down 6% from the June quarter.

Gross margins are expected to improve to 58% to 59%, up from 48.7 % in the recently ended quarter.

Operating expenses are projected to be roughly $24 million in the current quarter, down from $30.4 million in the June quarter.

Analysts on average forecast a loss of about $5 million on $37.7 million in revenue this quarter.

Mindspeed shares were down 3.4% at the close of trading Monday to a market value of about $105 million.