Shares of DTS Inc., which makes audio parts for speakers, DVD players and computers, jumped Tuesday after it swung to a first-quarter profit on a rise in demand for high-definition products.
For the quarter ended March 31, income from continuing operations rose to $3.3 million, or 18 cents per share, while analysts polled by Thomson Financial expected a profit of 13 cents per share.
Thomas Weisel Partners analyst Lloyd Walmsley said in an analyst note that the company reported "clean first-quarter results ahead of expectations."
DTS beat his estimates on higher-than-expected revenue from 2007 holiday promotions of high-definition products.
Despite the company's strength in the Blu-Ray high-definition video market, Walmsley noted that management remains cautious going into the second quarter because of economic concerns and manufacturing delays.
The supply difficulties have been caused by the unexpected rapid resolution of the high-definition "format war" between Blu-Ray and defeated rival technology HD DVD.
DTS has also been forced to retool production to compete against lower-priced products.
Walmsley expects these production problems to be resolved by the second half of the year.
He raised his 2008 earnings-per-share estimate to 47 cents per share from 46 cents per share and his revenue estimate to $56 million from $55 million.
DTS shares rose $3.48, or 12.2 percent, to $31.98. They have traded in the past year between $19.98 and $34.12.
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