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October 27, 2009
Entropic Communications Inc. (ENTR - US$ 2.55) 2-Equal Weight
Solid Q & Guide Raised
Post close, connected home and MoCA innovator
ENTR delivered solid 3Q results above consensus
and with its MOCA & DBS offering being more
broadly deployed moved 4Q guidance above
street estimates. With improved execution in a
consolidating arena, our higher end ests and
target edge upwards.
3Q Ahead; Rev of $31.0M above our est $29.5M
w/diversified MoCA shipments, slightly higher
opex $14.7M vs our est of $14.6M & better than
expected GM enabled EPS of $0.02 vs ours &
Street est of $0.01. Cash +$2.1M to $34.3M
Guide Moves Up; 4Q rev of $34 to $35M +10-13%
versus our $32.9M with higher GM and slightly
higher opex on R&D to $15.0M with Entropic
targeting non-GAAP EPS of $0.04.
Ests/Target Edge Up; Ests edge higher from $0.30
to $0.31 in CY10 as we look for traction at TWC &
Cox to offset softer VZ in addition to increased
penetration w/ENTR's CSS solutions. Tuner may
add promise. We note the potential for
consolidation within the sector. 2-EW at present,
but PT to $4.50 or ~14x CY10 EPS of $0.31 or
1.8x sales of $172M.
United States of America
EPS (US$) (FY Dec)
New St. Est.
New St. Est.
-0.06A -0.06A -0.06A 0.03E 0.06E 0.03E