April 29, 2008
Knobias Clip Report (4-29-2008)
By admin
Submitted By Knobias ClipReport
CEVA: Shares Jump on Positive Earnings Report
Tuesday’s session saw the indices diverge as the Fed kicked off the first of a two day meeting which will culminate on Wednesday with the expected announcement of a 25 basis point cut. Earnings from MasterCard, Visa, and Corning beat estimates, holding off a deeper loss on the big board.
The dollar firmed as many expect the Fed will signal that rate cuts are done for time being. The sentiment has arisen since many feel the Fed without any ammo left is a sitting duck for more speculation in commodities which would send inflation soaring.
Along with the Fed’s decision, the market will also have to digest the first quarter gross domestic product data. Economists were expecting a .2% rise but also could reveal that the economy has shrunk. Stocks also shrugged off the consumer confidence report which saw inflation expectations rise to record highs not seen since the aftermath of Hurricane Katrina.
In the small cap space, one company reported some fairly positive earnings. CEVA, Inc. (CEVA) is a leading licensor of silicon intellectual property (SIP) platform solutions and DSP cores for mobile, consumer electronics and storage applications. CEVA’s IP portfolio includes comprehensive solutions for multimedia, audio, voice over packet (VoP), Bluetooth and Serial ATA (SATA), and a wide range of programmable DSP cores and subsystems with different price/performance metrics serving multiple markets. In 2007, CEVA’s IP was shipped in over 225 million devices.
Total revenue for the first quarter of 2008 was $10.1 million, an increase of 30% compared to $7.7 million reported for the first quarter of 2007. First quarter of 2008 licensing revenue was $5.1 million, an increase of 10% from $4.6 million reported for the first quarter of 2007. Royalty revenue for the first quarter of 2008 was an all-time record high of $3.7 million, an increase of 91% over $2.0 million for the first quarter of 2007 and a sequential increase of 23% over $3.0 million for the fourth quarter of 2007. Revenue from services for the first quarter of 2008 was $1.2 million, an increase of 10% compared to $1.1 million reported for the first quarter of 2007.
Net income for the first quarter of 2008 was $5.5 million, compared to net income of $0 for the first quarter of 2007. Diluted net income per share for the first quarter of 2008 was $0.27 per share, compared to diluted net income per share of $0 for the first quarter of 2007.
During the quarter, the Company concluded ten new license agreements. Eight agreements were for CEVA DSP cores and platforms and two were for CEVA SATA technology. Target applications for customer deployment are 3G smart phones, cellular femtocells, portable multimedia players and solid state drive (SSD) devices. Geographically, three of the ten deals signed were in the U.S., six were in Europe and one was in the Asia Pacific region.
Gideon Wertheizer, Chief Executive Officer of CEVA, stated: “The first quarter of 2008 represented the most successful quarter in CEVA’s five year history, with record total revenue, royalty revenue, net income and earnings per share. Record royalties of $3.7 million reflect the Company’s growing market share expansion in the cellular handset market. Our strong presence across all the key handset segments, comprising of ultra low-cost, mid-range and high-end 3.5G phones, continues to grow as many of the leading handset manufacturers transitioning to multi-source strategies favor CEVA’s DSP technology.”
With a consumer demand switch to more high-end 3.5G phones, the name is certainly one to follow over the coming months. Investors would be wise to watch.
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