Vitesse's Loss Narrows, but Revenue Drops

The chip company says its product realignment is starting to pay off.
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Vitesse Semiconductor

(VTSS)

managed to reduce its net loss for the fiscal second quarter, but in a reflection of ongoing pain in its sector, it saw revenue shrink from the same period last year.

The company, which sells chips into both the data storage and troubled communications markets, cut its net loss to $25.1 million, or 12 cents a share. Last year saw a net loss of $44 million, or 22 cents a share.

At the same time, revenue in the March quarter tumbled nearly 5% from last year's levels to $40.2 million.

Revenue and a pro forma loss of 5 cents a share were both in line with analysts' expectations.

Vitesse took a handful of charges, including $2.1 million for the amortization of goodwill; $6.2 million for the amortization of deferred compensation; $336,000 for a restructuring charge; and $5.5 million for a tax adjustment.

In a statement, CEO Lou Tomasetta called the overall business environment "difficult, with capital spending remaining sluggish." He added that sequential sales were up 5%, "largely due to our product realignment into markets such as storage, metro and Ethernet that are beginning to recover."