Q1 2008 MEDIATEK INC Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Welcome, and thank you for standing by. (OPERATOR INSTRUCTIONS).

I would like to turn the call over to Ms. Sophia Liang. Ma'am, you may begin.

SOPHIA LIANG, SENIOR MANAGER, IR, MEDIATEK: Hello, this is Sophia Liang, the Senior Manager of Investor Relations, MediaTek. Welcome to our earnings release for the first quarter of 2008. I'm going to first of all spend a few minutes, quickly go through the financial figures, and then I will hand over the rest of the meeting to Mr. Mingto Yu, CFO and spokesman of MediaTek, and Mr. Mingto Yu would guide you through the business outlook of the coming quarter and also conduct the Q&A session.

So, for the first quarter of 2008, we delivered revenue of $19.3 billion, which was down 4.8% from Q4 last year, while it went up 29.8% from the first quarter of 2007. The gross margin of the first quarter was 52.1%, which was down from 54.8% in Q4 2007 and down from 57.3% in Q1 2007. Gross profit of the quarter was $10.1 billion, which was down 9.5% from Q4 last year, while up 18.1% from Q1 last year.

Non-GAAP operating expenses for the quarter were $4.6 billion, which was down from $4.6 billion in Q4 last year, while up from $2.3 billion from Q1 last year. Our non-GAAP operating margin was down to 28% in the quarter, from 31.9% in Q4 last year and the 41.3% in Q1 last year. Non-GAAP operating income was $5.4 billion, which dropped 16.2% from Q4 last year and 11.8% from Q1 last year.

The GAAP operating expenses for the quarter were $5.9 billion, including accrued employee profit sharing expenses of $1.3 billion, apart from non-GAAP operating expenses. The GAAP operating margin was down to 21.2%, from 31.9% in Q4 last year and 41.3% in Q1 last year.

Our GAAP operating income was $4.1 billion, which dropped 36.6% from Q4 last year and 33.3% from Q1 last year. Net non-operating items generated income of income of $174 billion for the quarter, compared to an income of $272 million in Q4 last year and an income of $1.6 billion in Q1 last year.

Non-GAAP net income was $5.3 billion in the quarter, which was down by 16.2% from Q4 last year and 32.4% from Q1 last year. Non-GAAP net margin was 27.3% for the quarter, which was down by 31% in Q4 last year and 52.5% in Q1 last year. GAAP net income ended $4 billion in the quarter, which was down 36.2% from Q4 last year and the 48.5% from Q1 last year.

Non-GAAP net earnings per share were $5.12 for the quarter, compared to $6.11 in Q4 last year and $7.58 in Q1 last year. The GAAP earnings per share were $3.90 during the quarter, compared to $6.11 in Q4 last year and $7.58 in Q1 last year.

The cash and short-term investments at the end of the quarter was up to $51.7 billion and turnover days of accounts receivables was 35 days at the end of Q4 and the turnover of inventory was 102 days. That was a quick summary of the financial statements in our first quarter, year 2008.

And I will hand over the rest of the meeting to Mr. Yu to guide you through the business outlook and also the Q&A session. Thank you.

MINGTO YU, CFO AND SPOKESMAN, MEDIATEK: Okay, thank you, Sophia. Well, I think for the business outlook in second quarter, we see pretty good demand across all of our product lines. Even second quarter normally is a slow season in the year, but we see a pretty good demand from either the handsets or even the optical storage side. So overall, we see the revenue will grow approximately around 15% and since the -- for the gross margin, we can probably maintain flattish compared to the first quarter, so that's over currently what we can see for the second quarter and then I think I'll probably just open the floor for Q&A.

So, operator, we can …