Silicon Storage Technology Inc. (SST) (Nasdaq: SSTI) stock bounced 43 percent Thursday after the
maker of flash memory components predicted third-quarter revenues and
earnings that clobber analysts expectations. The stock closed up $2.02
(32.17%) to $8.25 on share volume that was nearly eight times
Silicon Storage said it expects revenues for the September quarter to be
between $73 million and $77 million, well ahead of the $60 million analyst
consensus figure from Thomson Financial Securities Data. Likewise, the company
predicts pro forma earnings of 1 cent to 2 cents a share, topping analyst
predictions of a penny loss. The positive earnings news greatly outweighed
Silicon Storages negative news that it plans to record a $40 million to $45
million charge against inventory for the quarter.
Slower information technology spending had taken a toll on the company,
which sells 13 percent of its products to networking OEMs and the rest to
PC, peripheral, and consumer electronics makers. During last years third
quarter, Silicon Storage earned 36 cents a share on $164 million revenues,
which is more than double the new estimate for this years quarter. In 2000,
the company had $490 million in sales. The consensus for this year is $286
million. But that could change as analysts revise their numbers upward.
Shortly after Silicon Storages news, Credit Suisse First Boston raised
its 2001 revenue estimate from $272 million to $300 million and its 2001
estimate to $330 million. CSFB has nearly tripled its 2001 earnings forecast
from 4 cents to 11 cents and expects 15 cents in 2002.
Despite calling todays news an amazing accomplishment, CSFB maintained
its Hold rating on the stock. Three of the four analysts who follow the
stock rate it a Hold while one rates it a weak Buy.