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EZchip Profit Tops Estimate; But Stock Down - Update

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2/13/2013 11:22 AM ET

Israel-based Ethernet network processor maker EZchip Semiconductor Ltd. (EZCH: Quote), Wednesday reported a swing to fourth-quarter profit, on higher revenues and the absence of one-time charges incurred a year ago. The company's earnings and revenues for the quarter also topped Street estimates.

EZchip said that Huawei, one of its five major NP-4 network processor customers, has not yet placed any production orders and may "offer a lower-end in-house solution in parallel to the high-end NP-4 solution."

The company said it believes that NP-4 can prop up its revenues in the next few years, and expects year-over-year growth in 2013 when compared with 2011.

Investors were mostly unimpressed with the results, dragging EZchip shares down by about 10 percent in morning trade on the Nasdaq.

EZchip reported fourth-quarter net income of $4.8 million or $0.17 per share, compared with a net loss of $6 million or $0.22 per share last year.

Results for the prior year included a charge of $10 million related to early repayment to the Israeli Office of Chief Scientist.

Excluding items, adjusted earnings for the quarter were $7.8 million or $0.26 per share, compared with $6.3 million or $0.22 per share a year ago.

Analysts polled by Thomson Reuters expected earnings of $0.21 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues in the quarter increased 7 percent to $15 million from $14 million in the prior year. Analysts on consensus estimated revenues of $14 million for the quarter.

Gross margin for the quarter expanded to 83.2 percent from 6.6 percent a year ago.

EZchip is trading at $29.06, down 9.86%, on a volume of 1.8 million shares.

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by RTT Staff Writer

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Chipmaker Advanced Micro Devices Inc. said Thursday after the markets closed that its first quarter loss narrowed from last year, helped by strong revenue growth in its graphics and visual solutions business. The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly revenue. After trending higher over the past few sessions, stocks showed a lack of direction throughout the trading day on Thursday. The major averages spent the session bouncing back and forth across the unchanged line before ending the day mixed. While the major averages closed on opposite sides of the unchanged line, they all showed only modest moves. U.S. Secretary Of State John Kerry said Thursday that he and his counterparts from Russia, Ukraine and the European Union have reached an agreement on a preliminary plan for ending the ongoing crisis in Ukraine. Kerry was speaking at the end of the Ukraine contact group's first meeting, comprising the foreign ministers of Russia, Ukraine, the EU and the U.S., in the Swiss city of Geneva.
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