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GNSS turned in a good quarter but the merger with PXLW is the big news for the future. Gross margins returned to >40% even in their LCD controllers which is surprising and probably short lived. Competition from the Taiwanese and STM will keep GM low, even in SXGA. However, they still seem to be winning the majority of market share. Malibu is taking off in the flat panel TV area.
The strategy seems to be, use small but consistent profits from LCD controller (GNSS) and projectors (PXLW) to fund R&D into digital TV area and hope for home run there. It may work. The stock has done well from last summer's lows and is still a hold here.
Next quarter will be good for GNSS. From CC, I'll guess at revenue of $60M ($32 already booked) with GM of 40% gives $24M. GAAP expenses are $23M but I'll discount the options and amortization (3.6M) but count the legal expenses(lawyers want to be paid with cash) for expenses of 19.4M. Profit of 4.6M with 20% tax so $3.7M of profit/31M shares. Fair EPS of $0.12. For comparison proforma will be reported at $7.6M profit and $0.19 EPS so it should be a good quarter.
The good news for next quarter will probably drive stock price above $20 in next 3 months but the future will be all about the PXLW merger. Any techies know if PXLW technology will be a plus for GNSS?
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