Chipmaker NeoMagic Corp. (Nasdaq: NMGC) met analysts' estimates in its first quarter Thursday, but said production problems will result in lower-than-expected sales and earnings in its second quarter.
NeoMagic earned $8.6 million, or 34 cents a share, on sales of $72.4 million.
First Call consensus expected the Santa Clara, Calif. company to earn 34 cents a share in the quarter.
Its shares closed up 1/16 to 9 3/8 ahead of the earnings report.
"The results which we achieved for the first quarter were very much in line with our expectations, and we are pleased with the financial results which we have reported," said CEO Prakash Agarwal in a prepared release. "However, now we are predicting lower revenue and profit in our second quarter."
The $72.4 million in sales represents a 52 percent improvement versus the year-ago quarter when it earned $6.7 million, or 26 cents a share, on sales of $47.7 million.
Company officials said it wouldn't be able to meet demand for its best-selling MagicMedia256AV chips, meaning second-quarter sales would fall to about $60 million.
First Call consensus expects NeoMagic to earn 33 cents a share in the second quarter.
"We are focused on resolving the capacity constraints on our current products, and bringing our new 3D products to production," Agarwal said. "We have some difficult issues ahead of us, but I am confident that we will resolve those issues.''
NeoMagic shares moved up to a 52-week high of 23 13/16 in December before falling to a low of 8 7/8 earlier this month.
Three of the five analysts following the stock rate it a "hold."