International Rectifier Corp. (IR)® reported fiscal second quarter financial results. Adjusted earnings were $42.5 million (or $0.58 per share) for the December 2006 quarter on adjusted consolidated revenue of $354.7 million. This compares to adjusted earnings of $37.8 million (or $0.52 per share) for the September 2006 quarter on adjusted consolidated revenue of $344.2 million. For the prior-year December 2005 quarter, adjusted earnings were $26.5 million (or $0.37 per share) on adjusted consolidated revenue of $278.8 million.
On a GAAP basis, net income was $71.9 million (or $0.99 per share) for the December 2006 quarter versus $34.1 million (or $0.47 per share) for the September 2006 quarter and $24.3 million (or $0.34 per share) for the prior year December 2005 quarter. On a GAAP basis, revenue was $327.6 million, $315.8 million and $254.8 million for the December 2006, September 2006, and December 2005 quarters, respectively. GAAP revenue excluded $27.1 million, $28.4 million and $24.0 million of revenue from discontinued operations for the December 2006, September 2006, and December 2005 quarters, respectively, which were included in adjusted revenue.
As a result of the contemplated sale of the company’s Power Control Systems (PCS) business and in compliance with GAAP, IR has reported the Non-Aligned Product segment’s financial results as discontinued operations. Commodity Product financial results were not included in discontinued operations at this time, as the company expects to have significant ongoing involvement from certain transitional foundry and other services to be provided to Vishay following the divestiture. The company’s prior period GAAP financials have been restated to conform to current period presentation.
IR’s adjusted earnings for the December 2006 quarter excluded $26.5 million (or $0.36 per share) of tax benefit relating to the recognition of deferred tax assets tied to the difference in book and tax basis of certain subsidiaries being sold as part of the sale of IR’s PCS business, $4.3 million (or $0.06 per share) of prior period research and development tax benefit relating to Congress reinstating the research and development tax credit retroactive to the beginning of January 2006, and $2.0 million (or $0.02 per share) of pretax severance and restructuring charges. IR’s adjusted earnings included the Non-Aligned Product segment which was reported in the discontinued operations under GAAP. This was $0.5 million of pretax earnings in the December 2006 quarter.
Adjusted earnings for the September 2006 and the December 2005 quarters excluded $5.2 million and $3.0 million of pretax severance and restructuring charges, respectively, and included $0.3 million of pretax earnings and $4.3 million of pretax losses from discontinued operations, respectively.
