Silicon Motion Technology posts Q3 results above the Street, "optimistic" for Q4

Jennifer Schonberger | Oct 31, 2007 10:42am EDT | Comment

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Shares of Silicon Motion Technology Corp. (Nasdaq: SIMO) are advancing this morning after the fabless semiconductor company reported third-quarter results above the Street’s estimates. The small cap also noted it’s “optimistic” for the fourth quarter.

For the three months ended Sept. 30, the Taiwanese company recorded earnings per share of $0.40 per share, above the $0.32 per share eight analysts polled by Thomson Financial were on average forecasting. For the third quarter last year, the company had EPS of $0.31 per share.

Net sales clocked in at $45.8 million, a shade higher than the consensus of eight analysts polled by Thomson Financial of $44.34 million. The current quarter sales represent an increase of 44% over the $31.63 million in sales the company racked in for the same quarter last year.

Business at Silicon Motion boomed for the quarter. Highlights include total unit shipments increased 57% year-over-year at 78.5 million units. Also, Microsoft Corp. (Nasdaq: MSFT) selected the company's embedded flash controllers for its recently launched next-generation flash-based Zune portable media player.

Going forward, Silicon Motion's CEO, Wallace Kou, said he is more optimistic about the company’s current business outlook than compared to three months ago. Wallace said he expects NAND flash bit growth in the fourth quarter to be “much stronger” than the third quarter. Additionally, the executive noted that despite an expected slowdown in consumer spending, “current indications suggest that handsets and other electronic devices that use Silicon Motion’s products continue to sell well.”

As a result, for the fourth quarter, management expects revenue of approximately $50 million to $52 million, and gross margins to remain in the 52 to 53% range. Eight analysts surveyed by Thomson Financial are expecting on average sales of $49.82 million.

Shares of Silicon Motion (SIMO) gained $3.24, or 14.93%, to $24.94 at 10:34 a.m. ET. Shares of Silicon Motion have been trading in the range of $14.41 to $29.00 for the past 52 weeks.