Conexant Systems Inc. said Wednesday it pushed enough inventory out the door in the past quarter that phase 1 of its revamp is done.
The struggling Newport Beach chipmaker reported sales of $170 million in the quarter ended March 31, down 30% from a year ago. But the company said its operating loss narrowed by more than half, to $61 million.
Shares of Conexant were up 7% to $1.30 in after-hours trading.
Conexant has been trying to push excess inventory out of its distribution system,something that has hamstrung it for the past year.
“Our only disappointment during the quarter was that the timely completion of our two-quarter inventory reduction initiative required a number of out-of-the-ordinary channel actions,” said Chief Executive Dwight Decker. “These included selectively placing higher-cost products into more price-sensitive applications, and special pricing for certain customers on selected slower moving products. This dynamic depressed second fiscal quarter gross margins to 35.3% of revenues, a level below our expectations entering the quarter.”
Conexant’s second phase of its rebound plan includes growing revenue, completing cost reductions and being profitable before the end of the calendar year.
The company said it expects to see its sales for the June quarter rise 12% to $190 million. Analysts were looking for sales of $180 million for the quarter.
