If you've never heard of Conexant Systems Inc. (Nasdaq: CNXT), now would be a real good time to listen up. The up-and-coming maker of chips for wireless communications applications said Tuesday it will "significantly" exceed estimates in its third quarter.
Company officials said third-quarter sales will be more than 15 percent higher than the year-ago quarter, resulting in an unexpected boost to the Newport Beach, Calif. company's bottom line.
"Quarter to date, we are experiencing strong sequential growth across all of our expansion platform businesses: wireless, network access, digital infotainment and personal imaging," said CEO Dwight Decker in a prepared release. "Demand is particularly strong for our network access products as the worldwide Internet infrastructure continues to expand dramatically."
First Call consensus expects the company to earn 11 cents a share in the quarter.
Last quarter, Conexant shattered analysts estimates and reached profitability two quarters ahead of expectations.
Back in April, Merrill Lynch chip analyst Joseph Osha identified Conexant as one of a handful of stocks that could blow up in the next few quarters. "Conexant is one stock that's going to be on the move," Osha said. "It'll easily beat the Street number. It's one you're going to want to own."
Conexant shares closed off 1 1/16 to 45 5/16 Tuesday. However, the stock peaked at an all-time high of 47 1/4 last week after slipping to a low of 13 shortly after its January initial public offering.
Decker said growth in several product areas will guarantee an upside surprise in the third quarter.
"In addition, unit shipments of our personal computer modem products continue to grow steadily, but with firmer pricing and a more attractive portfolio mix than we had previously anticipated," Decker said.
Conexant Systems was created when Rockwell International Corp. spun off its semiconductor systems business to shareowners in December 1998. Conexant is the world's largest independent company focused exclusively on providing semiconductor products for communications electronics.