EZchip Semiconductor Ltd. (Nasdaq: EZCH; TASE:EZCH) published its third quarter financials yesterday, and, at least as far as the revenue line is concerned, there were no surprises. The company reported revenue of $19.2 million, in line with the warning it recently published in which it cut its guidance from $22 million to $19 million. The revenue figure is 12.9% below the previous quarter's.
Net profit amounted to $4.2 million, representing a 36% decline, while on a non-GAAP basis net profit fell 15% to $8.5 million, or $0.28 per share, one cent below the consensus analysts' estimate.
For the first three quarters of 2014, EZchip posted a non GAAP net profit of $29.6 million, 16% more than in in the corresponding period of 2013.
For the fourth quarter of 2014, EZchip sees revenue of $22-24 million, 9.5-19.5% more than in the corresponding quarter of 2013, but below the analysts' estimate. Total revenue for 2014 will thus be up to $85.6 million, representing annual growth of 21%. EZchip recently completed the acquisition of Tilera, which will add to its revenue.
In the fourth quarter of 2014, EZchip generated cash flow of $14.1 million from its business, and had $223 million cash at the end of the quarter.
EZchip CEO Eli Fruchter said,"2014 started off with two record quarters but is currently being impacted by a slowdown in carrier spending. We believe this is temporary and looking further out, carrier spending is forecasted to resume growth and with it, our corresponding sales into this market. It is also important to highlight that revenues for the first nine months of 2014 were up 21% from the first nine months of 2013.
"On November 5th, we closed the acquisition of Tilera Corporation. Our strategic goal with this acquisition is to leverage technology and expertise from EZchip and Tilera, to build new powerful processors and deliver some of the highest throughput and lowest power processing solutions to large growth markets represented by data center and cloud networks. Overall, the upcoming NPS and Tilera chips, intelligent network adaptors and appliances are expected to grow our total available market to over two billion dollars by 2017, and significantly diversify our served markets and customers."
EZchip is traded in New York and Tel Aviv at a market cap of $585 million.
Published by Globes [online], Israel business news - www.globes-online.com - on November 13, 2014
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