Hittite Microwave Q3 2009 Earnings Call Transcript

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2009-10-22 18:25:19.0

Tags: Barclays Plc., Call Transcript, Earnings, Network Technology, Operational Accounting, Networking, Finance, Seeking Alpha, Hittite Microwave Corp.

Question-and-Answer Session

Operator

Ladies and gentlemen, we'll now begin the question-and-answer session. (Operator's Instructions) Our first question is from the line of Romit J. Shah with Barclays Capital.

Romit J. Shah - Barclays Capital

Steve, you mentioned in Q3 that you saw growth in six out of your eight end markets, what's your expectation for Q4?

Stephen G. Daly

Well, I think that when we give our guidance and talk about the next quarter we categorize the markets as strong, neutral, and weak, and from today's perspective that's probably the best way to characterize it. So we would envision military, space, and fiber markets being strong, and microwave communications in broadband markets being neutral, and the cellular and automotive markets being weak.

Romit J. Shah - Barclays Capital

Okay. It seemed as though one trend we've seen over the last couple of quarters is that the breadth of your business has been improving in Q3 versus Q2. What is your expectation that that trend would continue in Q4 and can you comment specifically on what you're seeing in the infrastructure space?

Stephen G. Daly

On the first part of your question, are you referring to the revenue or the product introduction rate?

Romit J. Shah - Barclays Capital

I'm referring to revenue.

Stephen G. Daly

Right. So we generally look at our business as not having a lot of seasonalities so every quarter has a very different chemistry and makeup so it's really a type of business that we have limited medium term and long term visibility because we start each quarter with about 50% of our business in backlog. So each quarter, as we talked about Q2 compared to Q3, were very different and that's just the nature of our business.

In terms of the long-term growth perspectives in infrastructure, we thin there's a lot of good things happening there and certainly just looking at the activity in India with the release of the 3G license coming up, that should certainly provide the industry with a lot of activity over the next year or so. That's just one example.

Romit J. Shah - Barclays Capital

Okay. Let me just shift gears quickly to your Q4 guidance. You're forecasting revenues to increase about 3.5%-4% at the midpoint and earnings are essentially flat. Should we assume that gross margin comes down a bit in Q4 or should we think about OpEx maybe trending up a little bit more?

 

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