Pixelworks -22.5% on soft Q4 guidance; projector market weakness blamed
Nov 6 2015, 10:30 ET | By: Eric Jhonsa, SA News Editor Contact this editor with comments or a news tip
Though it beat Q3 EPS estimates and just slightly missed on revenue, Pixelworks (NASDAQ:PXLW) guided on its earnings call (webcast) for Q4 revenue of $13M-$15M and EPS of -$0.05 to -$0.14, below a consensus of $17.1M and -$0.04.The company sees macro pressures in China and other emerging markets weighing on Q4 projector video processor sales, and forecasts the projector market will now decline slightly Y/Y in 2015. It expects the market to return to growth in 2016, and for Pixelworks to outgrow it via share gains. A ~50% share is targeted.Mobile (Iris video processor) revenue is expected to grow modestly in Q4, but only totaled $250K in Q3. A recent Asus tablet design win is said to be driving interest from third parties. As expected, a second-gen Iris chip began volume production in Q3.Q3 details: Projectors were 91% of revenue, TV/panels 7%, and mobile 2%. Boosting EPS: Gross margin (non-GAAP) was 50.2% vs. 48.3% in Q2 and 50.4% a year ago, and above guidance of 48%-50%. Q4 GM guidance is also at 48%-50%. Also helping: Operating expenses fell by $800K Y/Y to $8.5M. Pixelworks ended Q3 with $29M in cash, and a $3M in short-term debt.Q3 results, PR
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