Boston, MA 10/11/2013 (wallstreetpr) – Shares of the company have soared in recent times, after it announced 4Q EPS at $1.51. This is way better than the consensus estimate of a meager $0.24. However, the surge in the EPS was the cause of a minimal rise in revenue, being at $2.84 billion, as against the consensus estimate of $2.7 billion. This means that such surge in EPS is managed at the back of controlling costs at the company, which helped it post a superior EPS despite achieving near expected revenue.
The company’s master stroke had been the integration of Elpida in the company. The company has now become well poised to compete in a favorable market environment. Revenue from sales of DRAM products in the fourth quarter of 2013 were 50% higher as compared to the third quarter. The company was able to manage an improvement in consolidated gross margin of 25% in 4Q2013, as compared to 24% in 3Q2013. This shows that the company has had an almost equal gross margin. Therefore, it can well be interpreted that costs other than operational costs, such as administrative and other office expenditures, were brought under control to post such an increased EPS.
The future prospects at the company seem bright, with no hints of attaining saturation, even after the stock has gained 175% this year alone. The company is efficiently manned by management who has been making the right decisions at the right time, to create the right product mix. The company has also shifted its focus to high margin product, thereby concentrating its resources on those products which add the maximum value. It is in this view that the company sold its Israeli facility to Intel. The company had timely realized the fact that products manufactured there had already attained its peak demand, and there sales were now on the decline.
