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GT Advanced Technologies Management Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: GTAT

Revenue for the June quarter was $167 million, and EPS came in at $0.12 on a GAAP basis and $0.16 on a non-GAAP basis. We achieved achieve the gross margin of 36%, in line with our guidance and well above the performance of most of our industry peers. Our backlog, which largely underpins our revenue forecast, remain solid at $1.6 billion, and our assessment of risk is unchanged from what we described a quarter ago. We remain on track to achieve our top and bottom line guidance for calendar year '12, and continue to target growth in calendar year '13 as well.

In our sapphire business, as expected, ASF shipments moderated as our customers focused on commissioning their factories, training their teams and getting the material qualified. To some of these buildouts continued at a good pace, and it is our expectation that ASF shipments will start to build again later this quarter, and become very significant by year end as our customers resume their ramp into high-volume production.

As anticipated, we terminated a $32 million ASF order during the quarter with a customer in China that had not yet taken delivery. For terms of the contract, the customer forfeited its deposit and we're in the process of pursuing damages for breach of contract. Consistent with our commentary last quarter, we believe that an additional $40 million of ASF backlog could be at risk.

These relevantly modest adjustments aside, we've been very encouraged by recent developments in the LED industry, including reports of improved utilization, the Chinese government's increasing commitment to stimulate its domestic LED lighting market and reports that sapphire prices have stabilized, and in fact, have slightly increased.

Read the rest of this transcript for free on seekingalpha.com

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