By Supantha Mukherjee
BANGALORE, Jan 31 (Reuters) - Chipmaker Cavium Networks Inc posted better-than-expected fourth-quarter profit, helped by new design wins at its chip and software business, and said it agreed to buy a Chinese company to expand its media application offerings.
The company, which makes processors for networking and communications equipment makers, agreed to buy privately held Celestial Semiconductor for $55 million. Celestial provides ARM-based system-on-a-chip processor solutions for media applications.
'The new acquisition will grow their presence in television along with wireless high-definition multimedia interface (HDMI) products,' Stifel Nicolaus analyst Kevin Cassidy told Reuters.
'It could open up new markets for them. They don't have a lot of market share in TVs in general.'
The company, which competes with NetLogic Microsystems Inc , earned $34.6 million, or 70 cents a share, compared with a loss of $4.5 million, or 11 cents a share, last year.
Excluding items, the company, whose customers include Cisco Systems Inc, Juniper Networks Inc and Alcatel Lucent, earned 29 cents a share.
Fourth-quarter revenue rose 86 percent to $59.8 million.
Analysts expected earnings of 27 cents a share, excluding items, on revenue of $59.1 million, according to Thomson Reuters I/B/E/S.
The company's consumer broadband segment is driving growth and it may also be seeing growth in the Chinese 3G market through its customers Huawei Technologies and ZTE , analyst Cassidy said.
Shares of the Mountain View, California-based company closed at $39.54 on Monday on Nasdaq. The stock has gained a quarter of its value in the last three months.
(Reporting by Supantha Mukherjee in Bangalore; Editing by Sriraj Kalluvila) Keywords: CAVIUMNETWORKS/ (supantha.mukherjee@thomsonreuters.com; within U.S.+1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters messaging: supantha.mukherjee.reuters.com@reuters.net;) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
BANGALORE, Jan 31 (Reuters) - Chipmaker Cavium Networks Inc posted better-than-expected fourth-quarter profit, helped by new design wins at its chip and software business, and said it agreed to buy a Chinese company to expand its media application offerings.
The company, which makes processors for networking and communications equipment makers, agreed to buy privately held Celestial Semiconductor for $55 million. Celestial provides ARM-based system-on-a-chip processor solutions for media applications.
'The new acquisition will grow their presence in television along with wireless high-definition multimedia interface (HDMI) products,' Stifel Nicolaus analyst Kevin Cassidy told Reuters.
'It could open up new markets for them. They don't have a lot of market share in TVs in general.'
The company, which competes with NetLogic Microsystems Inc , earned $34.6 million, or 70 cents a share, compared with a loss of $4.5 million, or 11 cents a share, last year.
Excluding items, the company, whose customers include Cisco Systems Inc, Juniper Networks Inc and Alcatel Lucent, earned 29 cents a share.
Fourth-quarter revenue rose 86 percent to $59.8 million.
Analysts expected earnings of 27 cents a share, excluding items, on revenue of $59.1 million, according to Thomson Reuters I/B/E/S.
The company's consumer broadband segment is driving growth and it may also be seeing growth in the Chinese 3G market through its customers Huawei Technologies and ZTE , analyst Cassidy said.
Shares of the Mountain View, California-based company closed at $39.54 on Monday on Nasdaq. The stock has gained a quarter of its value in the last three months.
(Reporting by Supantha Mukherjee in Bangalore; Editing by Sriraj Kalluvila) Keywords: CAVIUMNETWORKS/ (supantha.mukherjee@thomsonreuters.com; within U.S.+1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters messaging: supantha.mukherjee.reuters.com@reuters.net;) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.