See Why Technology Company Topped Earnings Estimates and Boosted Guidance

A very nice earnings report from old friend Spreadtrum Communications (NASDAQ:SPRD) late last week, along with a big upgrade in revenue guidance – frankly I am surprised the stock only gained 6% (it was up some 12% in after hours Thursday night)   The stock obviously stalled at an almost identical place as the mid February intraday high.  This makes it tricky; one would probably like to buy in any ‘gap filling’ moment, and/or at a new high – currently it is sort of in no man’s land.

The main worry here is the product mix as China (and other emerging markets) move to 3G. Spreadtrum (NASDAQ:SPRD) seems to be growing leaps and bounds in the older technology interfaces – but hard to know the competitive landscape in the newer generation build.

  • Sales of wireless chips by unit volume rose 46% from Q3 for chips serving “2G” and “2.5G cellular connections, the company said. Sales of chips for 3G connections rose 7% from quarter to quarter. Average selling price was down 2% from Q3 and down 26% from the prior-year period.

But for now that is an issue for another quarter as there seems to be enough global landscape in 2 and 2.5G, as the guidance raise was significant.

  • For the current quarter, the company sees revenue in a range of $130 million to $135 million, beating the average $109 million estimate.

An interesting blurb by Needham as well late last week:

  • Needham & Co.’s Quinn Bolton today reiterated a Buy recommendation on Spreadtrum and a $30 price target, writing that the ability of its chips to support phones with multiple “SIM” cards is helping Spreadtrum to expand in India, Africa and Latin America.

Via AP:

  • Spreadtrum Communications Inc. (NASDAQ:SPRD), a Chinese company that makes semiconductors for wireless devices, on Thursday reported fourth-quarter results that beat analysts’ expectations as sales of its 2G and 3G chip products jumped.
  • Spreadtrum (NASDAQ:SPRD) said it earned $30 million, or 56 cents per share, compared with $1.4 million, or 3 cents per share, in the fourth quarter of 2009.  Excluding one-time items, the company said it earned 61 cents per share. Analysts polled by FactSet expected 57 cents per share on that basis.
  • Revenue tripled to $126.5 million from $42.3 million in the same quarter in 2009, topping analysts’ estimates for $123.5 million in revenue.
  • Fourth-quarter operating margins at the Shanghai-based company rose by 16 percentage points to 22.3 percent,.
  • For full-year 2010, Spreadtrum (NASDAQ:SPRD) earned $67.2 million, or $1.28 per share, compared with a loss of $19.3 million, or 43 cents per share, the year before.  Revenue more than tripled, rising to $346.3 million from $105.1 million in 2009.

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This is a guest post written by Trader Mark who runs the blog Fund My Mutual Fund.