Cypress Reports Third-Quarter 2010 Results

Cypress recorded GAAP net income of $34.4 million in the 2010 third quarter, or diluted earnings per share of $0.18. This compares with last quarter’s diluted earnings per share of $0.10 and a diluted net loss per share in the year-ago third quarter of $0.13.

Non-GAAP1 net income for the 2010 third quarter—excluding stock-based compensation, acquisition-related charges, restructuring and other special charges and credits—totaled $53.4 million, or diluted earnings per share of $0.28, which compares to non-GAAP1 diluted earnings per share of $0.24 for the prior quarter and diluted earnings per share of $0.10 for the year-ago third quarter.

“Cypress achieved its sixth quarterly sequential revenue increase, though revenue was slightly below our original guidance,” said Cypress’s President and CEO, T.J. Rodgers. “Strong sales, combined with our ongoing cost-reduction programs, led to record gross margin, very strong earnings and more than $100 million in cash flow generation.

“Our business was impacted by manufacturing limitations in our SRAM business, and slowing order rates in PC end markets and our distribution channel. Nonetheless, revenue was up 4% sequentially led by a 21% gain in our CCD division, which achieved record revenues for both our PSoC and TrueTouch product families.

Rodgers continued, “We have seen a backlog decrease as lead times in the industry begin to shrink to normal six-week levels from 12-plus weeks. Our book-to-bill at the end of Q3 decreased to 0.86, in line with normal seasonality and shrinking leadtimes, with MID down the most, and PSoC well above parity.

“Our PSoC and TrueTouch families continue to deliver strong new design wins and customer production ramps; we expect these businesses to outperform seasonal trends and again set record revenues in Q4. Overall, we estimate our total revenue to decrease sequentially in Q4, mostly due to the softer market for SRAM and legacy products.”