DivX, Inc. Q4 beats estimates, raises full-year earnings guidance
DivX, Inc. (Nasdaq: DIVX) reported third-quarter earnings that surprised the Street by 41% after Monday’s close and raised full year fiscal earnings guidance.
Shares of DivX jumped 28.98%, or $3.47, to $15.45 at 11:59 a.m. ET, on the fundamental news. Shares of DivX have been trading in the range of $11.35 to $31.89 for the past 52 weeks.
For the three months ended Sept. 30, the creator of products and services designed for media applications, reported net income of $5.9 million, or $0.17 per diluted share, above the Thomson Financial mean estimate of $0.12 per share.
DivX booked record revenue for the third quarter of $21.9 million, representing an increase of 42% over revenue of $15.4 million earned in the third quarter last year.
“DivX is fundamentally performing well and the outlook for the company is financially positive,” said Avondale Partners analyst John Bright. “Increased adoption of the DivX certification software and DivX Connected product will drive growth into 2008.”
During the quarter DivX said it launched DivX Connected and will rollout the first DivX Connected devices in Europe in the fourth quarter.
The San Diego, Calif.-based firm also said it strengthened relationships with major OEM partners and saw greater consumer adoption in its licensing business during the quarter. Additionally, DivX said it made a new agreement with Qualcomm, extended an existing relationship with Samsung for its new mobile initiative and signed a multi-year renewal license with LG Electronics.
The company raised its earnings guidance for the full fiscal year and issued fourth-quarter earnings guidance. For the full year ending Dec. 31, DivX said it now expects EPS to range from $0.57 to $0.59, up from its original EPS guidance range of $0.48 to $0.51.
The consensus of six analysts polled by Thomson Financial was for earnings of $0.49 per share.
For the fourth quarter, DIVX is projecting EPS in the range of $0.16 to $0.18, above the mean estimate of earnings of $0.14 per share forecasted by six analysts polled by Thomson Financial.
Bright, who currently has a rating of “market outperform” on the stock, is forecasting earnings of $0.58 per share for the full year and $0.17 per share for the fourth quarter.
