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NEW YORK (TheStreet) -- OmniVision Technologies (OVTI) was gaining 8.5% to $17.56 Friday after beating analysts' estimates in its third-quarter results.

For its fiscal third quarter OmniVision posted earnings of 69 cents a share, beating analysts' estimates of 35 cents a share by 34 cents. Revenue fell 16.9% from the year ago quarter to $352 million, but still beat analyst estimates of $326.6 million.

For its fiscal fourth quarter the company expects earnings between 19 cents and 35 cents a share, compared to analyst estimates of 22 cents a share. OmniVision expects revenue between $275 million and $305 million for the quarter. Analysts estimate the company will see revenue of $284.3 million in the coming quarter.

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TheStreet Ratings team rates OMNIVISION TECHNOLOGIES INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate OMNIVISION TECHNOLOGIES INC (OVTI) 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 compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 154.3% when compared to the same quarter one year prior, rising from $10.35 million to $26.30 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.9%. Since the same quarter one year prior, revenues slightly increased by 1.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OMNIVISION TECHNOLOGIES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, OMNIVISION TECHNOLOGIES INC reported lower earnings of $0.80 versus $1.08 in the prior year. This year, the market expects an improvement in earnings ($1.71 versus $0.80).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, OMNIVISION TECHNOLOGIES INC's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for OMNIVISION TECHNOLOGIES INC is rather low; currently it is at 20.32%. Regardless of OVTI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, OVTI's net profit margin of 6.62% is significantly lower than the industry average.
  • You can view the full analysis from the report here: OVTI Ratings Report

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