The largest percentage loser on the Nasdaq yesterday, down a quarter of its value at one point, was Silicon Image
Shaking up the stock was a management upheaval. Steven Laub, who joined the company only in November as president, chief executive officer, and a board member, resigned because of "issues related to the scope of his role and responsibilities."
Silicon Image is a provider of multigigabit semiconductor and system solutions for communication applications that demand high-bandwidth capability. It hired Laub from struggling Lattice Semiconductor
Because of the executive musical chairs, the company scheduled its positive earnings announcement a day early -- at Tuesday's market close instead of Wednesday's. Revenue for the fourth quarter was up 52% from the same quarter last year, and the net loss decreased from $5.3 million to $80,000 -- about as close to breaking even as you can get. Pro forma net income fell one penny short of analyst estimates, although in the company's own words, pro forma earnings seem to have the potential to be quite abundant: "Pro forma net income or loss represents net income or net loss, exclusive of stock compensation expense, amortization of intangible assets, patent defense costs, acquisition integration costs, restructuring costs, gain/(loss) on derivative securities, gains on escrow settlement, and in-process research and development."
The company's results would have looked much better if an expected multimillion-dollar order had been booked. The company expects to book this order soon, and it should bolster future results.
Driving the growth at Silicon Image is the High-Definition Multimedia Interface (HDTI), the connection standard for the HDTV and consumer electronics market developed by the company and Sony
Investors would be wise to look at this cash-rich company and its technology portfolio. The management shuffle is a distraction that, in my estimation, should pass quickly. The earnings shortfall is insignificant, given that future revenue and earnings growth is expected to be strong.
Selling at 23 times 2005 estimated earnings, this is one small technology company that, thanks to yesterday's stock decline, is selling at a value.
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Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.