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The market continues to go for the jugular on any signs of weakness and Pixelworks has dropped below where I started to follow it. They first came to my attention at around $11. They had yet to turn a profit. Now 7 months later when they have finally entered positive earnings territory the price slips to around $9.
Record Revenue Up 49 Percent Year-Over-Year; Earnings

The good news:
Record Revenue Up 49 Percent Year-Over-Year

Earnings Per Share on GAAP Basis Increased to $0.12 From $0.01 in Second Quarter of 2003

*Record revenue of $48.5 million in the second quarter increased 49% from $32.6 million in the second quarter of 2003, and increased 7% over $45.3
million in the previous quarter

*GAAP net income in the second quarter of $5.8 million, or $0.12 per diluted share, improved from $0.4 million, or $0.01 per diluted share, in the second quarter of 2003

Pro forma net income of $6.1 million, or $0.13 per diluted share, increased 152% from $2.4 million, or $0.05 per diluted share, in the second quarter of 2003

The bad news:

Business Outlook for Third Quarter 2004

Due to very uncertain and unpredictable economic conditions, it is particularly difficult to predict product demand and other related matters.

The Company estimates net income per share in the third quarter of 2004 will be $0.08 to $0.11 on a GAAP basis and $0.09 to $0.12 on a pro forma basis, based on the following estimates:

*Revenue of $47.0 to $50.0 million, a year-over-year increase of 32 to 41
percent.

*GAAP gross profit margin of 45.0 to 47.0 percent. Pro forma gross profit margin, which excludes an estimated $132,000 in non-cash expense for the amortization of acquired developed technology, of 45.3 to 47.3 percent.

*R&D and SG&A expenses, combined, of $14.8 to $15.3 million.

*Non-cash expenses for stock-based compensation and amortization of
assembled workforce of approximately $250,000 (excluded for pro forma reporting purposes).

*Interest income, net of approximately $250,000.

*Effective tax rate of 34 to 36 percent of net income before income taxes.

The bad news was the $0.08 to $0.11 third quarter and the expectation that it should have been $0.15. The third quarter is seen to be flat.

Nevermind that they are finally making money at all :)

Crazy stock market

>^..^<
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