UTStarcom looking beyond China

Oct 18, 2002 12:00 PM, Jim Barthold

In the third quarter, the company’s operating income, excluding non-cash write-offs on employee stock options and acquisitions, climbed 55% to $33.6 million or 30 cents per share, from $21.7 million or 20 cents a share in the third quarter of last year. Net earnings totaled $30.8 million, or 27 cents per share compared to $18.8 million or 17 cents a share last year and net sales rose to $265.5 million from $170.5 million.

The company predicted revenue would grow at least 31% in 2003 and earnings per share would rise about 28%.

Additionally, CFO Mike Sophie said UTStarcom was in line to pick up $100 million in business from a “major communications operator in India” that is “material enough that we are building it into guidance for 2003.”

All told, the company is quickly trying to branch out from the Chinese market, said Hong Lu, UTStarom’s CEO.

“There’s a perception that China is UTStarcom’s only market and that China Telecom is our only customer. This is not true,” Lu said.

While China “is the market in which companies can obtain critical volume and deploy the most advanced technologies,” UTStarcom has signed sales in Japan, Taiwan, India and has had significant customer wins in Vietnam, Latin America and North America, he said.

“India will be our second largest market within the next two years and Vietnam should generate over $100 million revenue in the next couple years while we continue to increase our market position in Japan and gain traction in North America and Latin America and Asia,” he said.

Lu also defended the company’s product mix, while defending its unique Personal Access System [PAS] gear that bridges the gap between traditional wireline networks and advanced broadband wireless set-ups where it can achieve 64 Kilobits per second [K/ps] download rates.