UPDATE 2-China TechFaith gives weak Q3 outlook; to cut jobs
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Aug 18 (Reuters) - China TechFaith Wireless Communication Technology Ltd (CNTF.O) posted quarterly results above market estimates but gave a weak revenue outlook, and said chief financial officer resigned and the company would cut jobs, sending its shares down 19 percent.
The mobile phone handset designer said CFO Christopher Holbert resigned and assumed the position of advisor to the CFO and audit committee. He was replaced by Yuping Ouyang, effective Aug. 15.
The company warned that it expects a highly competitive environment and "challenging" economic conditions in the coming quarters and said it would restructure the GSM research and development team by reducing its work force to 700 by the third quarter.
As of Dec. 31, 2007, TechFaith had 1,363 employees, including 1,226 in research and development and supportive function, it had said in a U.S. regulatory filing on June 12.
Net income for the second quarter was $3.9 million, or 9 cents per American Depositary Share, compared with a net loss of $4.7 million, or 11 cents per ADS, a year ago.
Net revenue rose 77 percent to $56.6 million on strong demand for 3G and smartphone products.
Analysts on average had expected the company to earn 8 cents a share, before items, on revenue of $52.8 million, according to Reuters Estimates.
For the third quarter, the company expects revenue in the range of $30 million to $35 million. Analysts were expecting $59.5 million.
The company will incur severance cost of about $2 million in the third quarter of 2008, while the operating costs saved will be about $3 million starting from the fourth quarter.
COO, DEPUTY CEO QUIT
TechFaith also announced two key executive changes. It said President and Chief Operating Officer Gilbert Lee resigned but will remain a member of its board. Shugang Li will replace Lee as president.
Deputy CEO Bob Huo also resigned to pursue personal interests. He was replaced by Xiaonong Cai, the company said in a statement.
Shares of the company fell as much as 52 cents to $2.18 in trading after the bell. They closed at $2.70 in regular trading Monday on Nasdaq. (Reporting by Purwa Naveen Raman in Bangalore; Editing by Gopakumar Warrier)
