Why EZchip Semiconductor Shares Jumped

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What: Shares of Ethernet-network chip maker EZchip Semiconductor (NAS: EZCH) have jumped today by as much as 12% after the company reported better-than-expected earnings.

So what: First-quarter sales increased 9% to $14.4 million, topping the $14.1 million estimate. Non-GAAP net income also came out ahead of expectations at $7.8 million, or $0.27 per share, while analysts were just looking for $0.25 per share. Gross margin rose to nearly 85%, nearly 10% higher than a year ago.


Now what: CEO Eli Fruchter said that EZchip saw record sales to the company's largest customer, Cisco Systems (NAS: CSCO) , which is the first customer to adopt EZchip's NP-4-based platform that was just launched. Some customers are already beginning NP-5 designs and EZchip feels confident that it will lead the way in edge routing. So far, the initial feedback from customers has been "extremely positive."

Interested in more info on EZchip Semiconductor? Add it to your watchlist byclicking here.

At the time this article was published Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Cisco Systems. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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