Syntax-Brillian (Nasdaq: BRLC ) , better known to high-def TV shoppers as the company behind the Olevia brand, reports second-quarter earnings this Thursday night... according to Briefing.com, anyway. The company's latest guidance says it will report results "no later than the second week of September." Just in case Briefing.com guessed right about that date, let's sharpen the contrast and boost the brightness for a minute, the better to see what's going on with this explosive growth story.
What analysts say:
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Buy, sell, or waffle? Six analyst firms cover the company, and they all want to buy this stock. It's a different picture in our Motley Fool CAPS investor community, where Syntax only recently earned its second star, based on 378 user ratings.
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Revenues. The analysts are looking for about $198 million, on average. That would be a 231% improvement over last year's $59.8 million. Management's guidance allows for a range between $190 million and $210 million.
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Earnings. A $0.12 profit per share seems likely, according to the Wall Street consensus. That's worlds apart from the year-ago loss of $0.26 per share.
What management says:
The executive team keeps revising its revenue targets upward in every quarterly release, with a few freestanding updates in between. The company has beaten expectations soundly in the last two periods, and we'll get into the reasons for management's optimism in just a minute.
What management does:
The best news for Syntax owners isn't the revenue bounce -- that should be expected, given the current high-def migration across the nation. No, it is the fact that gross margins have improved while many LCD makers and home-theater retailers have seen their gross margins bruised and battered over the past year. The bottom line is now in the black on a trailing basis, and looking to continue upward.
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Margins
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12/2005
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3/2006
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6/2006
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9/2006
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12/2006
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3/2007
|
|
Gross
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14.4%
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12.5%
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12.4%
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13.5%
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14.9%
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16.3%
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Operating
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(0.7%)
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(1.0%)
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(1.4%)
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1.2%
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6.2%
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7.9%
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|
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(1.7%)
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(8.8%)
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(9.8%)
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(5.7%)
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(0.2%)
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2.9%
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All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.
One Fool says:
Those umlaut dots over the O in Olevia make the brand sound vaguely beer-related to a Swede like me (although not quite as funny as the unprintable connotations of staffing firm Modis (NYSE: MPS ) , blazoned across the Jacksonville skyline and similarly adorned).
Syntax has clearly taken advantage of the move to high-definition programming that has some companies salivating and others sweating bullets. That includes wide distribution of those Olevia screens through mass-market outlets like Circuit City (NYSE: CC ) , Target (NYSE: TGT ) , and Office Depot (NYSE: ODP ) , and management says that there are other chains in the works, too.
According to market research firm iSuppli, Syntax is the seventh-largest LCD screen supplier at the moment, its 6.1% share running ahead of household name Panasonic (NYSE: MC ) and breathing down the neck of high-end set designer Sony (NYSE: SNE ) . The current leader is privately held value brand Vizio, with a 14.5% market share, which is good news for Syntax. After all, the primary difference between the Olevia and Vizio is the breadth of their distribution channels, and that's something Syntax is actively working on. So there's clearly plenty of untapped opportunity left in this up-and-comer.
More high-def Foolery:
Fool contributor Anders Bylund holds no position in any of the companies discussed here, but he does own a nice Hitachi plasma set.
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