EZchip Semiconductor Earnings: Here’s Why Investors are Not Happy Now

EZchip Semiconductor Ltd. (NASDAQ:EZCH) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 1.94%.

EZchip Semiconductor Ltd. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share were the same at $0.29 in the quarter as EPS of $0.29 in the year-earlier quarter.

Revenue: Rose 5.7% to $16.7 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: EZchip Semiconductor Ltd. reported adjusted EPS income of $0.29 per share. By that measure, the company beat the mean analyst estimate of $0.27. It beat the average revenue estimate of $16.57 million.

Quoting Management: Eli Fruchter, CEO of EZchip, commented, “We are pleased to report that samples of the NP-5 network processor have arrived and are now being tested in our labs. We expect to move the NP-5 to production next year and believe that substantially all NP-4 customers will adopt the NP-5 for their next generation platforms. With the forecasted growth in edge routing, the recent improvement in carriers’ capex and the significant platforms that are projected to use the NP-4 and NP-5, we expect our customers will sell their platforms successfully, grow their market share and continue to drive growth for us in the coming years.”

Key Stats (on next page)…

Revenue increased 9.15% from $15.3 million in the previous quarter. EPS increased 26.09% from $0.23 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.29 and has not changed. For the current year, the average estimate has moved down from a profit of $1.15 to a profit of $1.12 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)