Shares of computer memory maker Smart Modular soar on better-than-expected 4Q guidanceBy AP
Friday, June 18, 2010
Smart Modular shares soar on bullish 4Q outlook
PHILADELPHIA — Shares of Smart Modular Technologies Inc. jumped in Friday premarket trading after the maker of computer memory products said it expects to post better-than-expected profit and revenue for the fiscal fourth quarter.
Oppenheimer analyst Gary Hsueh said a recovery in corporate spending and a strong market in Brazil for PCs led to the bullish forecast.
He raised his fiscal 2010 earnings estimate by 2 cents to 69 cents per share and his revenue forecast to $689 million from $657 million. He also increased his fiscal 2011 revenue and earnings outlooks.
On Thursday, Smart Modular said it expects to earn 22 cents to 24 cents per share on $200 million to $210 million in revenue for the quarter. Analysts surveyed by Thomson Reuters expect the company to earn 20 cents per share on $185.9 million in revenue, on average.
Hsueh said the company’s fiscal third quarter, which beat Wall Street’s expectations, was driven by improving network and telecom sales and strong desktop PC sales in Brazil. Smart Modular earned $14.9 million in the fiscal third quarter, reversing a year-ago loss. Revenue more than doubled to $201.2 million.
Shares of Smart Modular rose by 35 cents, or 5.4 percent, to $6.85 in premarket trading, having closed Thursday’s regular session at $6.50.