Fri, Jan 23, 2009 - Page 12 News List

Macronix sees net income fall in Q4 to NT$825 million

By Kevin Chen  /  STAFF REPORTER

Macronix International Co (旺宏電子), a local maker of memory chips that counts Nintendo Co among its clients, said yesterday its net income fell to NT$825 million (US$25 million), or NT$0.26 in earnings per share, in the fourth quarter on falling shipments amid the global economic downturn.

The Hsinchu-based company’s net income reached a five-year high of NT$2.12 billion, or NT$0.68 in earnings per share, in the third quarter. It made a profit of NT$1.24 billion or NT$0.41 per share in the fourth quarter of 2007.

Macronix produces read-only memory (ROM) products and NOR flash memory chips for clients.

Quarterly revenue fell 26 percent from the previous quarter and 7 percent from a year earlier to NT$5.59 billion in the three months ended Dec. 31, the company’s data showed.

“The sequential revenue decrease was a result of seasonal sliding demand for all product lines and the economic downturn,” Macronix said in a statement.

Gross profit was NT$2.38 billion, a 27 percent drop quarter-on-quarter and 8 percent decline year-on-year.

Gross margin for the fourth quarter was 43 percent, which was similar to a year earlier and the previous quarter, the company said.

From October to last month, the company’s capacity utilization rate was 69 percent, which fell below its October guidance of between 80 percent and 85 percent.

The company recorded 97 percent capacity utilization in the third quarter.

For the whole of last year, the company’s profits were about NT$4.5 billion, or NT$1.45 in earnings per share, which was nearly on a par with its 2007 profits of NT$4.65 billion.

On its outlook for the first-quarter, Macronix said it expected revenue to continue to erode because of sluggish demand and the global economic downturn.

The company’s first-quarter guidance was that total unit shipments would drop between 20 percent and 30 percent from the fourth quarter, average selling prices may decline between 20 percent and 25 percent from the previous quarter and gross profit margin may fall between 15 percent and 20 percent.

The capacity utilization rate may drop to between 40 percent and 50 percent, the company said.

Capital expenditure in the fourth quarter was NT$588 million, up from NT$256 million in the previous quarter.

Macronix attributed the rise in capital spending mainly to the need to upgrade production equipment.

The company gave no capital spending forecast for the first quarter.

Macronix reported a strong cash position and a relatively low debt ratio as of the end of last month, which was likely to help it through the difficult economic climate.

The company’s data indicated it had NT$18.64 billion in cash and cash equivalents as of the end of last month, while its debt-to-asset ratio was at 0.14 and lower than 0.16 in the third quarter.

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