Trident Microsystems books disappointing Q3, lowers outlook
Shares of Trident Microsystems, Inc. (Nasdaq: TRID) are sagging this morning after the provider of digital TV technology for the consumer digital video marketplace, reported disappointing fiscal first-quarter results and lowered its outlook after the close Thursday.
For the first three months ended Sept. 30, the Santa Clara, Calif.-based company net income was $24.1 million, or $0.38 per share on a diluted basis, and excludes a charge associated with an investigation into the company’s historical stock option practices. Sixteen analysts polled by Thomson Financial were on average expecting $0.32 per share. The company earned $20 million, or $0.32 per share, in the third quarter of 2006.
Net revenues were $88.1 million, compared with revenues of $71.3 million reported in the third quarter of 2006. The consensus of 16 analysts surveyed by Thomson Financial was $90.2 million.
The quarter included a $10.4 million charge for stock-based compensation expense, $3.76 million charge in legal and accounting fees related to the company’s investigation into its historical stock option practices, $1.65 million charged to cost of revenues relating to amortization of intangible assets and a $1.78 million gain from a cash dividend received as a shareholder of United Microelectronics Corp.
Going forward, Trident Microsystems lowered its outlook for the December quarter due to concerns on converting its customer base to using the company’s single chip SOC, its HiDTV Pro series. The company expects that it may face challenges and competition in the less profitable WXGA markets.
Trident Microsystems said it perceives the market is “clearly segmenting” between high quality Full HD ("1080P") capable large screen TVs found in prevailing specialty retailers and smaller, more cost sensitive, WXGA-driven TVs found in prevailing club channels and discount chains. Trident said that its position in the WXGA-driven TVs is eroding due to challenges from new entrants and off brands.
For the fourth quarter the small cap said it expects revenues in the range of $70 million to $72 million and said it plans to resume revenue growth in the second half of calendar year 2008, due to expectations that its HiDTV Pro UX/WX/QX will begin shipping in high volume at that time. Sixteen analysts polled by Thomson Financial are on average forecasting revenues of $91.66 million.
Shares of Trident Microsystems (TRID) plunged 38.3%, or $4.68, to $7.53 at 10:18 a.m. ET. Shares of Trident Microsystems have been trading in the range of $11.97 to $23.59 for the past 52 weeks.
