Boston, MA 03/12/2014 (wallstreetpr) – Pixelworks, Inc. (NASDAQ:PXLW) which designs, develops and markets video processing components and software was everything that a good stock can be in the past few days. The stock was gaining on every session with premium margins. Yet the company has little to show today for that excitement which defined its trading a few days ago.
The excitement was short-lived, it is now clear, and that is properly written on the manner investors are willing to trade the stock now. Around 12:20 p.m. EDT Wednesday, the stock was changing hands at $6.19, having dipped 3.25 percent. Note the stock was writing new record prices last week after its big revelation that unmasked Apple Inc (NASDAQ:AAPL) in its books.
Big Revenue Contributor
It was not easy for Pixelworks, Inc. (NASDAQ:PXLW) to hide the identity of some of its key customers. In regulatory filing, the company announced that Apple Inc was among the customers that heavily contributed to its revenue in 2013. The amount of money obtained from business with Apple Inc was more than 10 percent of the total revenue for the year.
Immediately this revelation came out, investors were full in action, seeking to acquire shares of Pixelworks, Inc. (NASDAQ:PXLW) based on the thought that the relationship with Apple Inc could spell greater benefits for the company in future. Of course, Apple Inc (NASDAQ:AAPL) is known to have interest in TV and high-definition iPhones and iPads, thus it would be in need of more pixel processing technology to achieve the high quality content displays in these upcoming devices.
The technology that Pixelworks, Inc. (NASDAQ:PXLW) provides is suitable for manufacturers of projectors, flat panel televisions and other digital display devices where video quality is an issue.
Earnings Recap
Pixelworks, Inc. (NASDAQ:PXLW) last issued results on February 6, whereby it reported earnings per share 5 cents, missing analysts’ projection of 6 cents. Revenue was $15 million, precisely in-line with consensus estimate. Revenue in the latest quarter was up more than 10 percent year over year, while earnings emerged to profit from a loss of $0.15 per share in the corresponding quarter one year ago.
Bottom Line
Although Pixelworks, Inc. (NASDAQ:PXLW) shows attractive prospects, there are still concerns around its return on equity and other key metrics. It will call for the management efforts to execute in manner that leaves no doubt that the company has the firepower to maximize shareholder value.
