DivX stock up on improved Q1 outlook
DivX Inc. (Nasdaq: DIVX) said after the market closed today that it plans to report higher-than-expected earnings and revenue for the first quarter ended March 31.
The San Diego-based video compression software maker now expects that revenue for the first quarter will be between $19.8 million and $20.2 million and that pre-tax earnings will be flat to up compared with the fourth quarter of 2006. DivX reported net income of $7.4 million, or 21 cents per share, in the 2006 fourth quarter.
The company had previously projected it would report earnings per share that would be slightly lower than the fourth quarter results of 21 cents on revenue of between $17.3 million and $19.3 million. DIVX plans to report full results on May 1.
DivX makes its money from software licensing, advertising and content distribution. Its technology has been downloaded more than 200 million times since January of 2003, according to the company.
The DivX format can be transferred online and played across a number of consumer electronics devices. DivX videos files can be stored on a regular DVD.
For the year ended Dec. 31, DivX reported net income of $16.4 million on revenue of $59.3 million.
With a market capitalization of about $667 million, DivX’s shares climbed by $2.52, or 12.5%, to $22.62 in after-hours trading Monday on the news of the revised guidance. It’s stock has traded as high as $31.89 (on Nov. 29, 2006) and as low as $18.00 (on Sept. 26, 2006) in the past year.
By Mary Ann Azevedo
