Why EZchip Semiconductor Tanked Hard
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What: Shares of EZchip Semiconductor have tanked hard today, down by 26% at the low, after the company reported fourth-quarter earnings.
So what: Revenue in the fourth quarter totaled $15.2 million, resulting in non-GAAP net income of $7.8 million, or $0.26 per share. Those figures were ahead of consensus estimates, which were calling for $14 million in sales and $0.21 per share in adjusted profit. The company incurred a one-time charge of $9.9 million, or $0.22 per share, due to the early repayment to the Israeli Office of Chief Scientist.
Now what: There were some concerns over soft guidance, but Benchmark is defending the stock. Analyst Gary Mobley believes that product cycle ramps are still set to result in strong revenue growth, even if it's inconsistent at times. Benchmark is maintaining its buy rating on EZchip along with its $40 price target. Mobley thinks the concerns over key customers like Tellabs and Huawei are overblown.
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The article Why EZchip Semiconductor Tanked Hard originally appeared on Fool.com.Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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