"The results of the second quarter were mixed," is how Zoran Corp. (Nasdaq: ZRAN) observed president and CEO Dr. Levy Gerzberg. Although the company beat the analysts' revenue forecast, it missed the loss per share forecast and cut its guidance for the third quarter.
Zoran's share price plunged 9.3% at the opening on Nasdaq today to $8.86, giving a market cap of $413 million.
The processor developer for digital entertainment and imaging products, such as DVDs, DTVs, and printers, posted $93.4 million revenue for the second quarter, down from $102.7 million for the corresponding quarter of 2009. The company beat its guidance and the analysts' consensus of $92.2 million.
GAAP-based net loss was halved to $6.7 million ($0.13 per share) for the second quarter from $13.8 million for corresponding quarter. Non-GAAP net loss narrowed slightly to $4 million ($0.08 per share) for the second quarter from $4.3 million for the corresponding quarter. The company missed the analysts' consensus of a loss per share of $0.07
Zoran's third quarter guidance is also quite far from the analysts' forecasts. While this is not unusual for the company, it raises the question about who is to blame for the disconnect between the company and the analysts covering it. Whereas the analysts' revenue consensus is $110.7 million for the third quarter, Zoran's cut its guidance to $98-103 million, 10-15% from its previous guidance.
Zoran's GAAP-based losss per share guidance is $0.09-0.11, reflecting a net loss of $4.5-5.5 million, and its non-GAAP loss per share guidance is $0.04-0.06, reflecting a net loss of $1.5-3 million. The analysts are far more optimistic, predicting earnings per share of $0.09, or a non-GAAP net profit of $4.5 million.
Part of the problem apparently stems from the difficulties in the digital television market. Ginzburg said, "Our outlook for DTV for the remainder of the year has been substantially reduced, primarily due to customer program delays and customer share loss to tier-1 brands."
Conversely, he is optimistic about digital cameras and printers. "We believe we are gaining market share and are seeing new opportunities for growth in segments such as DSLR and HD video recording. Printer Imaging is recovering and we are beginning to ship our highly-integrated Blu Ray solution."
In a separate development, Zoran announced that its integrated solution processor and IPS print language interpreter software has been deployed in Muratec America, Inc.'s MFX line of monochrome multifunction printers (MFPs) now shipping in the US. Muratec is a subsidiary of Japanese multinational Murata Machinery Ltd.
Published by Globes [online], Israel business news - www.globes-online.com - on July 27, 2010
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