AXT, Inc. Updates Expectations for the Third Quarter 2019
October 02 2019 - 5:26PM
AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound
semiconductor substrates, today provided an update to its
expectations for the third quarter 2019 financial results, which
will be announced on Oct. 30, 2019.
The company now expects third quarter revenue to
be in the range of $19.6 million to $20.0 million, due to a weaker
than expected demand environment, particularly in data center
connectivity and LED applications. In addition, raw material
revenue was also lower than forecasted. The revised revenue
expectation is down from the company’s previous guidance of $24.5
million to $26 million, provided at its second quarter earnings
announcement on July 24, 2019.
“Coming into Q3, we saw early signs of an
improvement in the demand environment, as projected by our
customers. But the orders did not materialize during the
quarter,” said Morris Young, CEO. “While we do believe that all of
our key markets are positioned for a return to growth, visibility
is poor. The ongoing geopolitical and global economic environment
has created near-term uncertainty in terms of the timing of the
recovery.
“Despite the disappointing shortfall in the
third quarter,” Young continued, “we remain confident about the
many trends that are expected to drive growth in our business, such
as the ongoing build-out of passive optical networks, hyperscale
data center upgrade, 5G telecommunications, LED lighting for an
array of applications, as well as a number of emerging
opportunities in healthcare monitoring, VCSELs, and more.
“As we navigate a difficult near-term demand
environment, we remain highly focused on the successful completion
of the relocation of our manufacturing facilities in China, and on
strengthening our business and driving greater efficiencies in our
model.”
Conference Call
The company will announce its financial results
for the third quarter 2019 in a press release immediately following
the close of market on Oct. 30, 2019. The company will
also host a conference call to discuss these results on Oct.
30, 2019 at 1:30 p.m. PT. The conference call can be
accessed at (844) 892-6598 (passcode 5191303). The call will also
be simulcast on the Internet at www.axt.com. Replays will be
available at (855) 859-2056 (passcode 5191303) until Nov. 5,
2019. Financial and statistical information to be discussed in the
call will be available on the company’s website immediately prior
to commencement of the call. Additional investor information can be
accessed at http://www.axt.com or by calling the
company’s Investor Relations Department at (510) 438-4700.
About AXT, Inc.
AXT designs, develops, manufactures and distributes
high-performance compound and single element semiconductor
substrates comprising indium phosphide (InP), gallium arsenide
(GaAs) and germanium (Ge) through its manufacturing facilities
in Beijing, China. AXT’s worldwide headquarters are
in Fremont, California where the company maintains its sales,
administration and customer service functions. The company’s
substrate products are used primarily in lighting display
applications, wireless communications, fiber optic communications
and solar cell applications. Its vertical gradient freeze (VGF)
process technology for manufacturing semiconductor substrates
provides significant benefits over other methods and enabled AXT to
become a leading manufacturer of such substrates. AXT has
manufacturing facilities in China and, as part of its
supply chain strategy, has partial ownership in ten companies
in China producing raw materials. For more information,
see AXT’s website at http://www.axt.com.
Safe Harbor Statement
The foregoing paragraphs contain forward-looking
statements within the meaning of the Federal securities laws,
including, for example, statements regarding the market demand for
our products, our growth prospects and opportunities for continued
business expansion, our market opportunity, our relocation and our
expectations with respect to our business prospects and financial
results. These forward-looking statements are based upon
assumptions that are subject to uncertainties and factors relating
to the company’s operations and business environment, which could
cause actual results to differ materially from those expressed or
implied in the forward-looking statements contained in the
foregoing discussion. These uncertainties and factors include but
are not limited to: the timing and receipt of significant orders;
the cancellation of orders and return of product; emerging
applications using chips or devices fabricated on our substrates;
end-user acceptance of products containing chips or devices
fabricated on our substrates; our ability to bring new products to
market; product announcements by our competitors; the ability to
control costs and improve efficiency; the ability to utilize our
manufacturing capacity; product yields and their impact on gross
margins; the relocation of manufacturing lines; possible factory
shutdowns as a result of air pollution in China; tariffs and
other trade war issues; the financial performance of our partially
owned supply chain companies; policies and regulations
in China and other factors as set forth in the company’s
Annual Report on Form 10-K, quarterly reports on Form 10-Q and
other filings made with the Securities and Exchange
Commission. Each of these factors is difficult to predict and
many are beyond the company’s control. The company does not
undertake any obligation to update any forward-looking statement,
as a result of new information, future events or otherwise.
Contacts:
Gary
Fischer
Chief Financial
Officer
(510) 683-5900
Leslie
Green
Green Communications Consulting,
LLC
(650) 312-9060
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