Monday, memory products maker SMART Modular Technologies (WWH), Inc. (SMOD) revised up earnings and revenue guidance for its second quarter, with both earnings and revenue expectations beating the present estimates of Street analysts. The company cited positive DRAM pricing environment, strong end user demand in PC and enterprise markets, and lesser seasonality impact as reasons for the guidance improvement.
The Fremont, California-based company said it now expects to report GAAP net income per share in the range of $0.16 to $0.18 for its second quarter of fiscal 2010. The new earnings per share range is a jump from the $0.06 to $0.08 per share guidance range the company announced along with its first quarter results on December 17, 2009.
The company now estimates non-GAAP net income per share for the second quarter to be in the range of $0.14 to $0.16, up from the previous guidance of $0.09 to $0.11 per share provided in December. On average, four analysts polled by Thomson Reuters currently expect the company to report earnings of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the second quarter is expected in the range of $140 million to $145 million, the company revealed. The new guidance range is 10% higher than the previous guidance of $125 million to $125 million. Analysts' consensus is $131.14 million for the second quarter.
The company expects to report gross profit in the range of $36 to $38 million, up 20% from the prior guidance of $30 to $32 million.
The improved guidance for the second quarter is primarily driven by a combination of the positive DRAM pricing environment, continued strong end user demand from both the PC and enterprise markets, and less than anticipated adverse impact from seasonality, the company said.
Looking ahead to the third quarter of fiscal 2010, the company said GAAP net income per share is expected to be in the range of $0.07 to $0.09 as DDR2 availability increases and DRAM pricing moderates. On a non-GAAP basis, SMART estimates net income per share in the range of $0.09 to $0.11 for the third quarter. Currently analysts are looking for earnings of $0.08 per share for the third quarter.
SMART expects third-quarter net sales to be relatively flat sequentially as demand stabilizes. Gross profit is expected to be in the range of $29 million to $32 million, the company revealed. Analysts expect revenues of $132.97 million for the third quarter.
For the preceding first quarter, SMART reported net income of $4.6 million or $0.07 per share, compared to a net loss of $6.9 million or $0.11 per share in the year-ago quarter. Non-GAAP net income for the quarter was $5.4 million or $0.08 per share, compared to $3 million or $0.05 per share in the last year quarter. Net sales for the quarter decreased to $123.1 million from $140.8 million in the prior year quarter.
SMOD is gaining $0.52 or 8.55%, and is trading at $6.60 on a volume of 641 thousand shares on Nasdaq.
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