Cypress results beat estimates on improving China demand

Cypress Semiconductor Corp, which makes touch sensing micro-controllers for cellphones, reported better-than-expected quarterly results on lower costs and an improvement in demand for its products in China. The company's shares rose 4 percent in premarket trade.
Revenue fell 7 percent to $172.7 million, the lowest percentage fall in four quarters, beating the $167.5 million analysts were expecting, according to Thomson Reuters I/B/E/S. Cypress' book-to-bill ratio rose to 1.04 in the first quarter, suggesting increased demand for its chips.
A book-to-bill ratio above 1 means a company has more orders in a quarter than it can deliver. "We thus expect solid sequential revenue growth in the second quarter for all divisions - the first quarter of 2013 was the bottom of the 2012 semiconductor slump for us," Cypress said in a statement.
The company's touch controllers are used in devices built by South Korea's Samsung Electronics Co, which accounted for 10.8 percent of Cypress' revenue last year. The company, which also makes specialised chips for computers, took a hit over the past year as PC sales continued their downward spiral.
Personal computer sales plunged 14 percent in the first three months of 2013, the biggest decline in two decades of keeping records, while tablets continued to gain in popularity, tech tracking firm IDC said last week. Lazard Capital said the company's touch business is likely recovering, helped by sales of low-end smartphones in China, while Wedbush Securities said the worst was over for the company.
Fairchild Semiconductor International Inc, another Samsung supplier that makes power-management chips for PCs and mobile phones, reported better-than-expected quarterly revenue as it sold more high-voltage chips to industrial and automotive customers. Cypress's net loss rose to $28.2 million, or 19 cents per share, from $19.5 million, or 13 cents per share, a year earlier. Excluding one-time items, it had a profit of 3 cents per share, above the average analyst estimate of 1 cent per share.