Zoran Corporation (Nasdaq: ZRAN), which produces chips for the digital entertainment and digital imaging markets, has reported revenue of $80.6 million for the first quarter, 21% more than the $66.5 million in the previous quarter, and 113% more than in the corresponding quarter in 2003.
Zoran made a net loss for the first quarter of $10.7 million, or $0.25 per share, compared with a net loss of $17.9 million, or $0.42 per share, for the previous quarter and a net profit of $193,000, or $0.01 per share, for the first quarter of 2003. The loss includes $12.9 million in charges related to the acquisition of Oak Technology, which was completed in August 2003.
Excluding amortization of acquisition-related purchased intangibles and deferred stock compensation from reported operating expenses, Zoran made a pro forma net profit for the first quarter of $2.2 million, or $0.05 per share on a diluted basis. This compares with pro forma net income of $1.4 million, or $0.03 per diluted share, for the previous quarter and $1.1 million, or $0.04 per diluted share, for the first quarter of 2003.
In its guidance, Zoran said it was expecting second quarter 2004 revenue to increase 12% to 18% from first quarter levels, with gross margins ranging between 42.5% and 43.5%. Pro forma earnings per share are expected to range between $0.08 and $0.11 per diluted share. Acquisition-related costs to be included under GAAP should be approximately $12.5 million, which would generate a GAAP loss of $0.18 to $0.21 per share for the second quarter.
For the full year, the company raised its revenue growth forecast to 65% to 75%. It sees annual pro forma earnings per share being 41% to 52% higher than in 2003. Acquisition-related costs to be included under GAAP for the full year should be approximately $50 million, which would generate a GAAP loss of $0.44 to $0.47 per common share.
Zoran president and CEO Dr. Levy Gerzberg said, “We are enthusiastic about our prospects in each of our core market segments and expect to achieve strong growth throughout 2004."
Zoran shares closed at $17.95 yesterday, giving the company a market cap of $764 million.
Published by Globes [online] - www.globes.co.il - on April 28, 2004