NEW YORK (TheStreet) -- Shares of Sigma Designs (SIGM) were falling 13.5% to $9.20 on heavy trading volume Thursday despite the provider of global integrated semiconductor solutions positive fiscal second quarter financial results.
Sigma Designs reported earnings of 12 cents a share for the second quarter of fiscal 2016, above analysts' estimates of 6 cents a share for the quarter. Revenue grew 35.7% year over year to $58.1 million for the quarter, beating analysts' estimates of $55.69 million.
The company reported a gross margin of 48.9% in the fiscal second quarter, compared to 51.1% in the year-ago quarter and 52.5% in the fiscal first quarter.
"We generated our fifth consecutive quarter of revenue growth, led by continued improvement in our two fastest growing target markets, SmartTV and Internet of Things," President and CEO Thinh Tran said in a statement. "In addition, we produced our fourth consecutive quarter of non-GAAP profitability. We expect this revenue growth trend to continue in the third quarter."
About 1.9 million shares of Sigma Designs were traded by 10:46 a.m. Thursday, above the company's average trading volume of about 693,000 shares a day.
TheStreet Ratings team rates SIGMA DESIGNS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SIGMA DESIGNS INC (SIGM) a HOLD. The primary factors that have impacted our rating are mixed – some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
You can view the full analysis from the report here: SIGM Ratings Report