Spreadtrum Communications Reverses Course After Q4 Earnings Report

Fabless semiconductor supplier Spreadtrum Communications

gapped higher at Tuesday's open after the company released its fiscal fourth-quarter earnings results prior to the opening bell. The stock has been in a downtrend and has significantly underperformed the market in 2013, losing almost 11 percent. Despite opening Tuesday higher, traders immediately began selling the stock on the open and at last check, SPRD had lost 3 percent to $15.81 after opening at $17.30. The bearish price action could be a sign of more weakness going forward in the name. The Shanghai-based company's stock trades as an ADR on the Nasdaq Stock Market. The company reported net income of $24.9 million or $0.47 per share, versus $35.2 million or $0.66 per share, in the year ago period. On a non-GAAP basis, Spreadtrum reported net income of $31.2 million or $0.59 per share, a decline versus the $41.5 million or $0.78 per share, the company reported in last year's fourth-quarter. This beat analysts' consensus EPS estimates of $0.50. Sales in the period were $203.1 million, versus $192.2 million last year. This also beat Wall Street consensus revenue estimates of $196.33 million. Looking ahead to Q1, the company guided for revenue of $180 million to $186 million. This compares to analysts' consensus revenue estimates of $171.56 million for the first-quarter. Overall, the report from Spreadtrum was better than expected, although investors have been quick to dump the stock nevertheless. Going forward, this may not be a good sign for Spreadtrum investors as sentiment remains weak in the name.