Company Update (NASDAQ:PXLW): Pixelworks, Inc. Reports Fourth Quarter 2015 Financial Results


Pixelworks, Inc. (NASDAQ:PXLW), an innovative provider of video display processing technology enabling the highest quality viewing experience for displays of all sizes, today announced financial results for the fourth quarter and fiscal year ended December 31, 2015.

Revenue for the full year 2015 was $59.5 million, compared to $60.9 million in 2014. Revenue from chips sold into the digital projector market increased 15% year-over-year, and the Company recorded its first revenue from video processors for mobile devices in the second half of 2015. Offsetting the contributions from sales into the digital projector and mobile device markets was a decrease in sales of chips into the television and panel markets as well as significantly lower licensing revenue compared to 2014.

For the fourth quarter 2015, revenue was $13.5 million, compared to $16.6 million in the prior quarter and $15.1 million in the fourth quarter of 2014. The sequential decline in revenue was primarily driven by a weaker demand environment in China and emerging markets for the Company’s projector chips.

On a GAAP basis, gross profit margin in the fourth quarter of 2015 was 50.6%, compared to 50.0% in the third quarter of 2015 and 50.0% in the fourth quarter of 2014. Fourth quarter 2015 GAAP operating expenses were $9.7 million, compared to $9.5 million in the previous quarter and $10.2 million in the fourth quarter of 2014.

For the fourth quarter of 2015, the Company recorded a GAAP net loss of $3.2 million, or$0.11 per share, compared to a GAAP net loss of $1.2 million, or $0.05 per share, in the third quarter of 2015 and GAAP net loss of $2.8 million, or $0.12 per share, in the fourth quarter of 2014.

On a non-GAAP basis, fourth quarter 2015 gross profit margin was 50.9%, compared to 50.2% in the third quarter of 2015 and 50.3% in the fourth quarter of 2014. Fourth quarter 2015 gross profit margin increased compared to the prior periods due to a more favorable mix of chips sold into the digital projector market during the quarter. Fourth quarter 2015 operating expenses on a non-GAAP basis were $8.8 million, compared to $8.5 million in the previous quarter and $8.8 million in the fourth quarter of 2014.

For the fourth quarter of 2015, the Company recorded a non-GAAP net loss of $2.2 million, or$0.08 per share, compared to a non-GAAP net loss of $0.2 million, or $0.01 per share, in the third quarter of 2015 and non-GAAP net loss of $1.4 million, or $0.06 per share, in the fourth quarter of 2014. Adjusted EBITDA in the fourth quarter of 2015 was a negative $0.9 million, compared to a positive $0.9 million in the previous quarter and a negative $0.1 million in the fourth quarter of 2014.

“Fourth quarter results were within the range of guidance; however, our core digital projection business was impacted by the weaker macro environment, especially in the emerging markets. Despite recent headwinds, digital projection revenue grew 15% in 2015 as a result of strong market share gains,” said Stephen Domenik, Pixelworks’ interim CEO. “In our mobile business, we made further progress throughout the year on customer validation and early market adoption, as demonstrated by production shipments of Iris chips in support of ASUS’ flagship ZenPad tablet.

“Although we expect revenue in the first quarter to reflect greater than normal seasonality in our digital projection business, we are beginning to see early signs of improvement from customers and have growing confidence that we will return to growth in the second quarter. Our outlook for mobile remains promising, as we look to further leverage our first-mover advantage.” (Original Source)

Shares of Pixelworks closed flat today at $1.40. PXLW has a 1-year high of $7.13 and a 1-year low of $1.35. The stock’s 50-day moving average is $2.24 and its 200-day moving average is $3.52.

On the ratings front, Pixelworks has been the subject of a number of recent research reports. In a report issued on December 15, Roth Capital analyst Krishna Shankar reiterated a Buy rating on PXLW, with a price target of $6, which represents a potential upside of 331.7% from where the stock is currently trading. Separately, on December 4, Craig-Hallum’s Richard Shannon initiated coverage with a Buy rating on the stock and has a price target of $5.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Krishna Shankar and Richard Shannon have a total average return of -6.5% and -9.6% respectively. Shankar has a success rate of 36.8% and is ranked #3344 out of 3612 analysts, while Shannon has a success rate of 46.2% and is ranked #2928.

Pixelworks Inc designs, develops & markets video & pixel processing semiconductors, intellectual property cores, software & custom ASIC solutions for digital video applications. Its products can be used in a various devices.