Why Silicon Image (SIMG) Stock Is Lower Today

NEW YORK (TheStreet) -- Shares of Silicon Image Inc. (SIMG) are down -0.60% to $4.96 after it lowered its second quarter revenue outlook late yesterday to a range of $58.5 million to $60.5 million, compared to its prior guidance of $71 million to $76 million.

Analysts surveyed by Reuters expected the company to post revenue of $73.31 million for the second quarter.

Silicon Image cited lower than anticipated mobile IC shipments in the quarter.

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TheStreet Ratings team rates SILICON IMAGE INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate SILICON IMAGE INC (SIMG) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • SILICON IMAGE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SILICON IMAGE INC turned its bottom line around by earning $0.14 versus -$0.13 in the prior year. This year, the market expects an improvement in earnings ($0.36 versus $0.14).
  • 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 85.9% when compared to the same quarter one year prior, rising from -$0.70 million to -$0.10 million.
  • SIMG has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.15, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for SILICON IMAGE INC is rather high; currently it is at 62.61%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.16% is in-line with the industry average.
  • SIMG, with its decline in revenue, slightly underperformed the industry average of 2.9%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: SIMG Ratings Report
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