Components | October 20, 2011

Nordic Semi with 8% revenue growth YoY

Nordic Semiconductor reported solid growth in revenue and operating profit in a challenging economic environment during the third quarter 2011.
Total revenue in Q3 2011 was MUSD 37.9, representing an 8% growth rate from the prior year. Sales to the PC / media controller business segment fell by 11% from the prior year, but this was offset by 64% annual revenue growth in other business segments.

Gross profit was MUSD 18.3, or 48% of revenue, compared with MUSD 15.8, or 45% of revenue during Q3 2010. The company’s gross margin has been positively affected by a shift in revenues from its highest-volume customers in the PC / media controller segment to its smaller customers in other business segments. The company expects that it will maintain a gross margin of 45 – 50% during the coming quarters, as manufacturing process improvements reduce its production costs.

© Nordic Semiconductor

Total payroll and other operating expenses were MUSD 8.5 in 3Q/2011, compared with MUSD 7.0 in 3Q/2010. The growth in operating expenses was primarily driven by an increase in the number of employees from 138 to 160 during the past year as well as by ordinary salary adjustments. In addition, operating expenses were impacted by a stronger Norwegian krone exchange rate and by increased product development expenses. Total depreciation expenses were MUSD 1.1 in 3Q/2011 compared with MUSD 1.1 in the prior year. The company has not made significant capital expenditures since the first half of 2010.

Due to the company*s growth in revenue and gross margin, Operating Profit (EBIT) was MUSD 8.7, compared with MUSD 7.7 in #Q/2010. Net financial items were MUSD 0.8 in 3Q/2011, compared with MUSD -0.2 in the prior year, driven primarily by the impact of exchange rate changes on balance sheet items.

Profit before tax was MUSD 9.5, compared with MUSD 7.5 in Q3 2010. Income tax expense was MUSD 2.3 in Q3 2011, or 24% of pretax profit. The company’s base tax rate is 28%, but the actual rate will fluctuate based on the effect of net financial items, as these items are calculated differently in the company’s financial reporting (calculated in USD) and its tax reporting (calculated in NOK).

Net profit after tax was MUSD 7.2 in Q3 2011, compared with MUSD 6.3 during Q3 2010. The company’s earnings per share were USD 0.043 in Q3 2011, compared with USD 0.038 in Q3 2010.
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