Cypress Semiconductor Corp.'s (CY) second-quarter profit more than doubled as sales of chips used in mobile phones and tablet computers continued to claim a greater share of the company's growing revenue.
Shares jumped 2.4% to $21.50 premarket Thursday after as results reached the high end of the firm's earlier guidance. The stock has nearly doubled over the past 12 months.
Cypress has posted improved profits in recent quarters as robust demand for smartphones helps drive sales of its touchscreen controllers. The company in January said it planned to more than triple its manufacturing capacity this year to meet the stepped-up demand, citing "a record number of design wins in high-volume mobile phone, tablets and other large screen platforms."
On Thursday, Cypress said it is partnering with graphics-chip maker Nvidia Corp. (NVDA) to develop systems for new tablets based on Google Inc.'s (GOOG) Android platform. The designs are based on Cypress's single-chip TrueTouch architecture for screens of up to 11.6 inches and Nvidia's Tegra mobile super chip.
The company in April also filed a patent-infringement suit against GSI Technology Inc. (GSIT) mostly related to GSI's Sigma Quad and Sigma DDR families of static random-access memory products.
Cypress reported a profit of $40.8 million, or 21 cents a share, up from $19.6 million, or 11 cents a share, a year earlier. Excluding stock-compensation and other impacts, earnings rose to 32 cents from 24 cents. Revenue increased 14% to $255 million.
The company's bullish April guidance had called for a per-share profit of 30 cents to 32 cents and revenue between $248 million and $255 million.
Gross margin narrowed to 54.5% from 56% amid a less favorable product and customer mix and higher depreciation caused by a capacity expansion project.
Sales jumped 22% over the first quarter in the fast-growing consumer and computation business, which now accounts for slightly more than half of Cypress' top line. Overall net inventory was flat from the previous quarter, while days of inventory dropped to 87 days from 97.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com