Shares in Emcore Corp. soared for a brief period this month, despite the chipmaker having posted a net loss in the fiscal third quarter.
The share price of the Alhambra-based semiconductor manufacturer for the aerospace and defense industries increased by 22% from a close of 67 cents on Aug. 8 – the day the company released its third-quarter earnings – and the close of 82 cents the following day.
The stock’s price has since fallen by 12% between Aug. 9 and its close of 72 cents on Aug. 14. Shares closed at 48 cents on Aug. 17. That is a loss about 82% from a year ago, when the stock closed at $2.65.
The company reported a net loss of $9.9 million (-18 cents a share) for the quarter ending June 30, compared with a net loss of $7.6 million (-20 cents) in the same period of the previous year. Revenue increased by 12.6% from the third quarter of the prior year to $26.7 million.
The company attributed the revenue increase to its inertial navigation business, which boastes a revenue increase to $26.7 million, or 10%, from the fiscal second quarter of this year. Emcore entered the inertial navigation business a year ago when it acquired that business segment from KVH Industries Inc. for approximately $55 million.
Jeffrey Rittichier, the chief executive of Emcore, said during a conference call with analysts to discuss third-quarter financials that the inertial navigations business performed better than expected.
“(It sets) the stage for the company’s evolution into a pure-play aerospace and defense business,” he said.
Rittichier also gave an update on Emcore’s sale of its broadband and defense optoelectronics businesses during the call.
On Aug. 8, the company said it had signed a nonbinding letter of intent for the sale of the defense optoelectronics product line and all broadband segment product lines, except chips, to Photonics Foundries Inc. in San Jose.
He said that the company expected to close on the sale during the current quarter.
“Completion of this sale would accelerate Emcore’s ability to narrow its focus on to inertial navigation,” Rittichier added. “It should also meet our objectives to create a seamless transition of supply to our customers and opportunities for our employees.”
The anticipated transaction does not include Emcore’s chip business or wafer fabrication assets.
The company has several interested parties currently conducting due diligence on the chip business, Rittichier said during the call.
“(We) expect to have a decision on the future direction of the fab within the current quarter,” Rittichier said.
As for guidance on upcoming quarters, Emcore is expecting a few supply chain issues that will affect order delivery dates and will tamp down on growth a bit for the current quarter, Rittichier said.
“Assuming that the sale of the linear product line to Photonic Foundries is completed, we expect consolidated revenue in the $26 million to $28 million range. This includes inertial navigation at $25 million to $27 million, along with approximately $1 million (from the) last time buys from the chip business,” he said, adding, “Looking beyond that into the December quarter we expect inertial navigation to have a revenue range of $28 million to $30 million.”
