Dolby Blinds Wall Street With Science

Dolby Labs (DLB Quote) surged 19% late Thursday after the company flew by targets and raised sights for its fiscal 2007.

The San Francisco audio engineering shop posted pro forma profit of $25.2 million, or 22 cents a shares, for the fiscal fourth quarter ended Sept. 29. Those numbers compare with an adjusted profit of $26.8 million, or 15 cents a share, in the year-ago period.

Total sales for the quarter were $102.1 million, a 29% improvement from the $78.9 million revenue level a year ago.

Analysts were looking for an 11-cent-a-share adjusted profit on $83.8 million in sales, according to Reuters Research.

For fiscal year 2006, Dolby reported total revenue of $391.5 million, compared to $328.0 million for prior year.

Looking ahead, the company expects total sales for the 2007 fiscal year to hit somewhere between $420 million and $450 million. That is well above the $405 million consensus target of nine analysts polled by Reuters Research.

"We saw good growth for our core technologies in fiscal 2006, and we now go into fiscal 2007 focused on extending these technologies across additional markets," CEO Bill Jasper. He added that the company would be "driving the adoption of newer Dolby technologies, and capitalizing on the Dolby brand, reputation, and business model to generate additional long-term growth opportunities."