Last year, Novatel Wireless
Novatel develops wireless solutions, such as wide-area network modems. With the technology, users can easily connect to the Net and corporate local area networks.
On the company's recent conference call, the mood was upbeat. Then again, Novatel had a blowout second quarter. Profits hit $3.2 million, which compares with a $9.7 million loss in the same period a year ago. Consensus was for $0.05 a share in earnings; Novatel posted $0.11 a share. Revenues surged 215% to $24.1 million.
And expect more growth for the rest of the year. Novatel boosted guidance, saying that profits should range from $0.13 to $0.14 a share in the third quarter, with revenues from $28 million to $29 million.
No doubt, Novatel spent its money wisely -- during the dot-com mania -- in building great technology. Now, the company is forging partnerships to leverage the technology in the marketplace. The deals are with tier-one companies such as AT&T Wireless
Yet the critical part of Novatel's success goes back to a deal struck in August 2002. The company signed a co-marketing and development deal with Lucent
It's an example of what companies can do, in tough economic times, to build value for the long term.
Want to discover promising small-cap companies? Take a free, no-obligation trial to Motley Fool Hidden Gems today.
Fool contributor Tom Taulli is the author of The EDGAR Online Guide to Decoding Financial Statements. He does not own shares in any of the stocks mentioned.