Mellanox revenue down but beats estimates

Revenue fell 26.5% to $98.2 million for the second quarter, while non-GAAP EPS fell 67% to $0.30.

Ahead of its delisting from the Tel Aviv Stock Exchange (TASE) at the end of August, InfiniBand developer Mellanox Technologies Ltd. (Nasdaq:MLNX; TASE:MLNX) published its financial report for the second quarter of 2013, after Wall Street closed yesterday. Despite the drop in quarterly revenue and profits, the company beat the analysts' top and bottom line forecasts.

Revenue fell 26.5% to $98.2 million for the second quarter from $133.5 million for the corresponding quarter of 2012. Mellanox forecast $92-97 million revenue in its guidance and the analysts' consensus was $96 million.

Non-GAAP net profit fell 67% to $13.8 million ($0.30 per share) from $42.9 million for the corresponding quarter. The analysts' consensus was earnings per share of $0.20.

Non-GAAP net profit for the second quarter excludes $11.2 million in share-based compensation expenses and $2.5 million in amortization of acquired intangible assets, and $1.8 million of charges for the acquisition of Kotura Inc. and IPtronics A/S.

“We are pleased with our second quarter results. We see growth in the demand for our InfiniBand and Ethernet products. We increased our Ethernet top-of-rack switch system revenue by 81 percent sequentially, and, although off of a small base, we believe this indicates our growth opportunity once we have all the building blocks required for the various markets we serve,” said Mellanox president and CEO Eyal Waldman.

UBS comments on the results: "Mellanox reported what could be the first of a series of recovery quarters following recent missteps."

Mellanox's share price fell 1.4% on Nasdaq yesterday to $47.79, giving a market cap of $2 billion, but rose 0.9% in after-hours trading, following the publication of the financials.

Published by Globes [online], Israel business news - - on July 25, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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