Strong first quarter earnings and a projections above estimates boosted shares of wireless chip maker Atheros Communications Inc. (NASDAQ: ATHR) in trading on Tuesday.
The Santa Clara, Calif.-based chip maker jumped $1.50, or 5.6 percent, to $28.29 in afternoon trading on the Nasdaq Stock market.
Strong demand for the company's wireless networking chips, common in notebook computers and consumer electronics, as well wired Ethernet chips helped the firmâ€™s profit. Late Monday, the company reported that first quarter earnings rose 12 percent to 7.6 million, or 13 cents per share.
Revenue in the first quarter was $95.5 million, up nine percent from the $87.8 million reported in the fourth quarter of 2006 and up 56 percent from the $61.1 million reported in the first quarter of 2006.
In a conference call with analysts, Chief Financial Officer Jack Lazar said that for the quarter, the company expects to earn 23 cents to 24 cents a share on revenue growth of 4 percent to 7 percent.
A mix of new products and entries into new markets should help the chip company achieve these numbers, according to Needham & Co. analyst, N. Quinn Bolton.
Beyond core WLAN, Bolton told clients, we believe new products in Ethernet, Bluetooth and Embedded WLAN should drive future growth, as [Atheros]executes its strategy to transform itself into a diversified communications chip company.
The broker maintained its Buy rating for the firm, and raised its price point to $31 from $28 a share.