Tag - DIVX

Digital media company DivX, Inc. (Nasdaq: DIVX) reported fourth-quarter earnings a penny above the consensus on Wall Street, but issued disappointing guidance for 2008 that sent shares crumbling to a 52-week low.

Shares of DivX plummeted 29.54%, or $3.01, to a 52-week low of $7.18. Shares have been trading in the range of $8.78 to $23.76 for the past 52 weeks.

The San Diego, Calif.-based company said it expects earnings to range from $0.44 to $0.52 per share on revenues of $95 million to $100 million due to higher product development costs.

Seven analysts polled by Thomson Financial are on average forecasting revenue of $104.24 million for 2008, while five analysts polled by Thomson Financial are on average projecting earnings of $0.67 per share.

“Guidance for 2008 was substantially below consensus,” wrote Avondale Partners analyst John Bright. “We continue to believe that DIVX has an attractive licensing business model with the potential to tap into online video distribution. However, DIVX also has a transition period ahead of it.”

Bright said he sees 2008 as a transition year in which DivX will invest in new initiatives, including forming agreements to become involved in online video distribution whether with "retailers" such as Netflix, Inc. (Nasdaq: NFLX), Blockbuster Inc. (NYSE: BBI) and CinemaNow. The analyst also noted the company will expand into new product categories beyond DVD players such as Blu-Ray players, and new certifications such as DivX HD and a new H.264 certification.

DivX, Inc. (Nasdaq: DIVX) shares are declining after the maker of video compression software announced before the opening that it is shuttering its Stage6.com website, which hosts streaming videos. The website competed with YouTube and had several advantages, including higher-resolution video.

The San Diego, Calif.-based firm said it made the decision after an exploration of strategic options that began more than six months ago. The company weighed selling, spinning off and shutting down Stage6. In a press release, DivX cited costs and resources as reasons for closing down the service.

As of 2 p.m. on Monday, DivX still had a link to Stage6 on the front page of its website. DivX said users will be able to view and download videos until Thursday. In a vaguely worded release, the firm said it will “continue to offer services that will make it easy to find videos online in the DivX format.”

In afternoon trading, DIVX shares are down 0.83%, or $0.10, at $11.94. Over the last 52 weeks, shares have ranged from $11.35 to $23.76.

For digital aficionados downloading videos from the Internet, DivX, Inc. (Nasdaq: DIVX) is as close to Nirvana as they can get. The San Diego, Calif.-based company offers a variety of software tools for creating, transmitting, playing and sharing digital video, widely considered the best in the business.

That also pitches the small cap up against some scary competition, including Microsoft Corporation (Nasdaq: MSFT), Google Inc. (Nasdaq: GOOG), Apple Inc. (Nasdaq: AAPL) and Sony Corporation (NYSE: SNE). Add to that the fact that its business and history of successes and failures have the clarity of an Ingmar Bergman film, and you have all the trappings of a hit investment.

DivX’s products have been surprisingly successful. Its codec software—a compression/decompression programs that shrinks video for quick downloading , then restores it to picture-perfect clarity—has been downloaded 180 million times since the company debuted eight years ago. Its video player software is embedded in over 1,800 consumer electronics products, including DVD players, video game consoles and digital cameras—a total of 200 million units altogether. Its software is used in 25% of the world’s DVD players and in some European countries that penetration rises to 90%.

But if the popularity of DivX software has seemingly climbed a stairway to heaven, its stock price for most of the past year has been on an express elevator to hell. DivX went public in September 2006 at $19 and peaked at $31.98 (its current 52-week high) two months later. Then it took a long slide, losing 60% of its value over 11 months, bottoming out at its 52-week low of $11.35 on Oct. 30.

Suddenly, though, investors love the company again. On Nov. 5 DivX reported third-quarter revenues up 42% to $21.9 million, but net earnings rose only 9.5% to $21.9 million. The reaction was swift: From a close of $11.98 on Nov. 5, the stock rose 56% to close at $18.63 a week later. It’s currently trading at about $17, with a market cap of about $589 million and a hefty P/E of about $42.

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.

Shares of DivX, Inc. (Nasdaq: DIVX) jumped in pre-market trading after the provider of video software tools used to play and share high-quality video announced this morning that it has signed a “global” agreement with Yahoo! Inc. (Nasdaq: YHOO) to offer consumers who download DivX video software tools a co-branded version of the Yahoo! Toolbar and Internet Explorer 7 optimized for Yahoo!.

The Yahoo! offering is expected to launch early November 2007 and will replace third-party software previously distributed by DivX.

Shares of DIVX shot up $1.11, or 7.71%, to $15.50 in pre-market trading.

Shares of DivX, Inc. (Nasdaq: DIVX) are edging higher in pre-market trading after the maker of video-compression software reported that it has inked a licensing agreement with Qualcomm.

Under the agreement, Qualcomm will include DivX technology in a range of Qualcomm video-enabled chipsets. The product will potentially allow consumers to access DivX video on a variety of mobile devices powered by Qualcomm’s chipsets.

Shares of DivX edged up $0.45, or 3.25%, to $14.29 in pre-market trading.

Correcting from Wed: DivX says it expects single-digit SG&A growth through year

(This story corrects an earlier version from Wednesday, which incorrectly stated DivX CEO Greenhall predicted single-digit revenue growth, where in fact he predicted single-digit SG&A growth. We apologize for the error.)

At a technology conference Wednesday afternoon, DivX, Inc. (Nasdaq: DIVX) CEO Jordan Greenhall said the San Diego, Calif.-based video compression software maker expects single-digit growth in selling, general and administrative expense for the rest of the year. Investors were flummoxed by the company’s nearly doubled 2007 first-quarter SG&A expenses, $10.8 million, from $5.9 million for the first three months of 2006, which came to light in DivX’s Q1 earnings release May 1. DivX also plans to penetrate the TV set-top box, mobile phone and camera markets, Greenhall told the Cowen and Company’s Annual Technology Conference in New York City.

“We hired some heavy hitters from Adobe, Sony and Yahoo!” Greenhall said. “The recruiting fees hit us in Q1.”

DivX announced Wednesday afternoon former Yahoo! sales executive Pamela Thompson Johnston was appointed as the company’s senior vice president for sales and marketing.

Greenhall apologized for poor communication with investors in the first quarter.

“We exceeded every single one of our targets, but did a poor job communicating with folks like yourself,.” Greenhall told investors.

After releasing first quarter results in early May, DivX shares have lost more than $5, or about 25%, in value. At that time, DivX announced a $3.7 million profit, or $0.10 a share, for the first quarter ended March 31, compared with $3.3 million, or $0.11 a share, in the year-ago period. Analysts on average were expecting a first-quarter per-share profit of  $0.14. Over the last 52 weeks, DivX shares have fluctuated between $13.80 and $31.89. On Wednesday, DivX closed at $15.09, up $0.42, or nearly 3%..

DivX, incorporated in 2000, is hiring a new chief financial officer to rectify the investor relations problems, Greenhall said. The company is close to hiring a CFO and “hopes to have an offer out by this time next week,” Greenhall said. DivX’s former CFO left the company April 24 for personal reasons.

Greenhall characterized the company’s social networking video website Stage6 as “a YouTube that doesn’t suck.” DivX is differentiating itself by providing longer form video support and professionally produced content, he said. The website has had 8.3 million visitors this month and when the website reaches 10 million visitors, “It will get exciting,” he said.

The company’s DivX Connected product will be competing head-to-head with Apple TV. Greenhall said he hopes Apple’s set-top device is successful, but does not control the market. DivX Connected will have more platform capabilities than Apple TV and will support a wider variety of digital formats, Greenhall said.

Also on the call, Greenhall said:

Shares of Hauppauge, N.Y.-based Hirsch International Corp. (Nasdaq: HRSH) are trading higher following news this morning that net income for the quarter ended March 31 nearly tripled.  The electronic embroidery machinery provider reported net income of $817,000, compared with $292,000 in the same period of 2006.  Analyst estimates were unavailable.  Shares are up $0.08, or 2.15%, to $3.80.

Shares of DivX Inc. (Nasdaq: DIVX) plunged on heavy volume in after-hours trading today after the San Diego, Calif.-based digital media company reported first-quarter earnings that came in below analysts’ estimates.

For the quarter ended March 31, DivX reported net income of $3.7 million, or $0.10 per share, on revenue of $20.2 million, compared with net income of $3.3 million, or $0.11 per share, on revenue of $14.1 million in the 2006 first quarter.

Seven analysts polled by Thomson First Call had estimated earnings per share of $0.14 on revenue of $19.8 million.

Shares of DivX Inc. (Nasdaq: DIVX) fell by $2.00, or 10%, to $18 on heavy volume in after-hours trading today after the San Diego, Calif.-based digital media company reported first-quarter earnings that came in below analysts’ estimates. For the three months ended March 31, DivX reported net income of $3.7 million, or $0.10 per share, on revenue of $20.2 million, compared with net income of $3.3 million, or $0.11 per share, on revenue of $14.1 million in the 2006 first quarter. Seven analysts polled by Thomson First Call had estimated earnings per share of $0.14 on revenue of $19.8 million. In just the first half-hour of extended-hours trading, more than 1.36 million shares had changed hands, compared with an average three-month daily volume of about 657,000 shares.

Shares of Novatel Wireless Inc. (Nasdaq: NVTL) rose by $0.79, or 4.2%, to $19.50 on heavy volume late today after the wireless broadband access solutions provider raised its 2007 non-GAAP earnings guidance by more than 50% to $1.00 to $1.05 per share. Twelve analysts polled by Thomson First Call were expecting earnings per share of $0.64 on revenue of $365.9 million. For the first quarter ended March 31, San Diego-based Novatel reported non-GAAP net income of $12.1 million, or $0.40 per diluted share, on revenue of $110 million. Analysts had estimated earnings per share of $0.28 on revenue of $98.3 million.

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.

Video compression software maker DivX ups earnings estimate