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UTStarcom Sales Rise 44.9%, Net Slides

6/06/2005 09:48:00 AM Eastern

Alameda, Calif. — UTStarcom reported a first-quarter 44.9 percent increase in net sales, hitting $901.8 million, up from a year-ago $622.3 million.

UTStarcom is a global player in IP-based end-to-end networking solutions and services. The company’s personal communications division, formerly Audiovox Communications, which was acquired last November, contributed $315.6 million of total sales for the three months, ended March 31.

Gross profit margin was 26.4 percent of sales in the first quarter, down from a year-earlier 28.3 percent. Gross profit margin, excluding the personal communications division, hit 38.3 percent of sales. Gross profit margin for the personal communications division was 4.3 percent of sales.

First-quarter net income came in at $38 million, down from the previous year’s $54.8 million.

As part of a restructuring, UTStarcom expects to reduce employees by about 1,400, or 17 percent of its global workforce. The company also plans to take a one-time charge of about $20 million to $25 million by the end of fiscal 2005. Actual restructuring charges will be reflected in the second quarter.

Audiovox Communications, which had been the cellular subsidiary at Audiovox, was sold to UTStarcom in June of 2004 for $165.1 million.