NeoMagic beats 3Q forecasts

NeoMagic Corp. (Nasdaq: NMGC) rolled past analysts' estimates in its third quarter Wednesday, earning $4.1 million, or 16 cents a share, on sales of $70.3 million.

First Call consensus expected the chipmaker to earn 11 cents a share in the quarter.

Ahead of the earnings report, NeoMagic closed up 1 1/4 to 11 11/16.

The $70.3 million in sales represents just a 4 percent improvement versus the year-ago quarter when it earned $8.6 million, or 33 cents a share, on sales of $67.4 million.

"I am pleased with our third quarter financial results, which were better than expected," said CEO Prakash Agarwal in a prepared release. "We are committed to further improve our operations and enhance our product offering for long-term growth and profitability."

NeoMagic shares surged to a 52-week high of 23 3/4 in December before slipping to a low of 7 1/8 in June.

First Call consensus expects it to earn 12 cents a share in its fourth quarter and 67 cents a share in the fiscal year.

Two of the three analysts following the stock rate it a "hold.">