Longtime exec in Austin's chip industry is heading west to take the reins at the California chipmaker.
Conexant is adding 802.11g-based wireless networking capabilities to its cable-modem chips to encourage Web surfers to beam digital content from PCs to other devices in the home.
Communications chipmaker Conexant reported a net loss of $200.7 million, or 78 cents a share, on revenue of $241 million for its second fiscal quarter ended March 29. That compares with a net loss of $262 million, or $1.08 a share, and revenue of $251 million for the same quarter a year ago. Excluding charges, the Newport Beach, Calif.-based company posted a pro forma loss of $88.3 million, or 34 cents a share. Analysts surveyed by First Call estimated that the company would post a pro forma loss of 37 cents. The company said it expects fiscal third-quarter revenue to grow between 3 percent and 5 percent from the previous quarter and that its pro forma loss will decrease by 15 percent. The company's Mindspeed division, which makes chips for telecom gear, grew 34 percent from the previous quarter to $19 million, the strongest growth of all its units.
Conexant said Thursday that AT&T Chief Technology Officer Hossein Eslambolchi has been elected to a newly established seat on the communications chipmaker's board. Eslambolchi has accumulated 90 patents in his 16-year career at AT&T, where he has held positions at Bell Laboratories and at AT&T's network services division. As CTO, Eslambolchi is responsible for the overall strategy of AT&T's research and development projects, and serves as president of Bell Labs. Conexant makes chips for cable set-top boxes, cell phones, modems and digital video equipment. The company, like the rest of the chip industry, experienced some turbulence during the past few months. Conexant reported total revenue of $1.1 billion for fiscal 2001, compared with $2.1 billion in revenue the previous year.
Conexant said Thursday that it expects to see a revenue increase in its current quarter because of strong demand for chips used in wireless devices. The communications chipmaker expects total revenue to be in the range of $211.1 million to $215.1 million in its first fiscal quarter ending Dec. 28, a jump between 5 percent and 7 percent, compared with the $201 million it posted in its fourth quarter. The company also said sales from it wireless chip unit will grow 25 percent in the first quarter from the fourth quarter, compared with 24 percent growth between the fourth quarter and third quarter. In the most recent fourth quarter ending Sept. 30, the unit generated $65.2 million in revenue, or 32 percent of the company's total. The upbeat news comes during turbulent times for the chip industry. Conexant announced layoffs and reduced earnings expectations this year.
The communications chipmaker also announces it will postpone the previously announced spinoff of its Internet infrastructure chip business.
Communications chipmaker Conexant said Monday that earnings and revenue for the third quarter would be below company forecasts and that it would lay off 450 employees. The Newport Beach, Calif.-based company now expects a loss of 45 cents a share, compared to a previously forecasted 40 cents to 45 cents a share. The company also expects revenue of $200 million, compared to the previous quarter's $251 million. Analysts surveyed by First Call expected Contexant to post revenue of $204 million and a loss of 43 cents a share. The layoffs are in addition to the 1,500 cuts Conexant announced last March. The company will also take a restructuring charge of $475 million in the third quarter and another charge in the fourth. Conexant is outsourcing production of generic chips while it continues to make specialized chips in-house. The company will announce earnings July 19 after the markets close.
Axcelerant raised $9 million in its second round of funding, led by new investors Gemini Investors and Baird Venture Partners. Riordan, Lewis & Haden, which led the company's $10 million first round, also contributed. Axcelerant provides VPN (virtual private network) security software and services to large businesses and will use the funding to boost sales, marketing and product-development activities. A VPN uses data encryption to securely connect two private networks over the Internet. The technology is more secure than a dial-up connection and is cheaper than buying a dedicated communication line. Axcelerant's customers include Broadcom, Conexant, Oracle, PeopleSoft and Sun Microsystems.