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On Feb. 13, 2009,

Monolithic Power Systems

(MPWR) - Get Report

reported that its Q4 FY08 earnings dropped 65.2% due to revenue decline and higher costs. Net income for the quarter was $3.23 million or $0.09 per share compared to $9.28 million or $0.26 per share a year ago. Excluding stock-based compensation and related tax effects, the company earned $0.16 per share, which beat the consensus estimate of $0.12 per share.

Revenue for the latest fourth quarter decreased 9.8% to $38.49 million from $34.71 million a year ago, as end product demand dropped sharply due to the global economic slowdown. Majority of the company sales came in from Greater China with sales of 41.0%. Product-wise, DC to DC product sales were $27.30 million, up 7.9% from the $25.30 million, driven by significant contribution from its new MiniMonster and battery charger products. However, Cold Cathode Fluorescent Lamp revenue declined 46.0% to $5.20 million, while Audio revenue dropped 37.1% to $2.20 million from $3.50 million.

Looking at the gross margin line, fourth-quarter gross margin was 58.04%, down 582 basis points from 63.86% in the same quarter of 2007. Total operating expenses increased 7.3% to $17.91 million from $16.69 million, mainly due to higher research and development expenses.

For FY08, Monolithic's earnings surged 109.2% to $24.23 million or $0.67 per share from $11.58 million or $0.33 per share a year ago. Revenue for the year increased 19.8% to $160.51 million from $134.00 million.

Looking forward, the company expects Q1 FY09 revenue to be in the range of $24.00 million to $29.00 million as compared to $134.00 million reported a year ago, citing the drop in general worldwide demand. In addition, it forecasts gross margin below the lower end of the company's target range of 60.00% to 63.00%; and litigation expense in the range of $1.5 million to $2.0 million.

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