Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Sukhi Nagesh with Deutsche Bank.
Sukhi Nagesh – Deutsche Bank Securities
On your guidance what gives you any confidence that you’ll be able to see a pick up in the second quarter of this year after this down quarter, the first quarter?
Kenneth Lowe
We do have the visibility, giving forecasts and things like that into the general expectations. Obviously when there’s a major adjustment like this there’s a considerable amount of conversation that takes place and an amount of analysis that goes into understanding exactly where you’re at. We’ve looked into this, we feel confident that this is an anomalous event like we said. This is a single, onetime event and we’re pretty confident that this market is just going to continue to grow as normal.
Sukhi Nagesh – Deutsche Bank Securities
What was your backlog at the end of the quarter? What’s your turns requirement for you to meet the April quarter guidance?
Kenneth Lowe
We usually don’t discuss backlog and go into that depth.
Kenneth Lowe
We did do our standard quarterly assessment last week to assess what we were expecting in turns business in addition to what had already been shipped plus our existing backlog and our current prediction doesn’t have any factor for any turns business.
Operator
Your next question comes from the line of Uche Orji with UBS. Please proceed.
Uche Orji – UBS
First of all if I look at your guidance I’m a bit surprised you’re able to maintain your gross margin guidance with this kind of revenue outlook. Can you just give us a little more insight as to how that will work and also if you can talk a little bit about what’s happening with Blu-ray? Is this just now decline and with the resolution of the HD issue is becoming in demand and design wins for Blu-ray?
Thomas E. Gay, III
I’ll address the gross margin question and as I had said in my part of the talk, we had said that we do expect some cost reduction efforts to have their effects in coming quarters and we also believe that product and customer mixes will benefit us and allow us to continue to believe that our target of the 50% plus or minus two is a reasonable one.
Kenneth Lowe
And then the second half of your question was about the Blu-ray and about declines there. We basically, in looking backwards, what happened is the Blu-ray manufacturers essentially entered the Christmas selling season with a large question mark as to how much they were going to do. In the third quarter they ordered an ample amount to make sure they could make it through the Christmas selling season. As they went into the fourth quarter they had just a little bit extra so their fourth quarter dropped down a little bit. We see continuing increases from some manufacturers, some people are staying the same. So all in all at this point in time we see Blu-ray as still a strengthening market as we move throughout the year.
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