Forbes has good write-ups (Cover story?) on Cube, I hope they don't sell out. May be, this is the reason for Friday' activity.
C-Cube Microsystems Inc.
Although C-Cube (nasdaq: CUBE) may be best known for its Video CD and DVD chips, the Divicom division, acquired in 1996, is what makes the company a broadband play. Divicom makes systems that compress, transmit and receive large quantities of digital audio and video data. Divicom's products also include audio/video encoding, data broadcast solutions, network management systems and consulting and integration services.
Recently C-Cube signed a deal with MediaOne (nyse: UMG), the cable operator that is being acquired by AT&T, to become the first U.S. cable system designed to incorporate the new OpenCable standards. C-Cube and Divicom will supply advanced decode/encode silicon systems in set-top boxes to provide interactive services for MediaOne's broadband subscribers.
The company also has relationships with such key industry leaders as Dell Computer (nasdaq: DELL), NEC (nasdaq: NIPNY) and Scientific-Atlanta (nyse: SFA) but there are other potential deals in the offing. There is speculation that chip giant Intel (nasdaq: INTC) is considering C-Cube as either an acquisition or alliance as it looks to move out of the PC market and into the set-top box business.
Today C-Cube's semiconductor business accounts for 60% of the company's revenues while Divicom made up the remaining 40%, growing 25% year-over-year.
The company announced strong first-quarter earnings of $96.5 million, a 10.5% increase over $87.3 million for the same period in 1998 and $95.8 million for the fourth quarter of 1998. Net income rose to $13 million, or 32 cents per diluted earnings per share, over $10.2 million, or 27 cents a share, for the same period last year.
"We believe C-Cube is positioning itself well to benefit from the digital video revolution that is taking place in the consumer electronics market," says Gregory Mischou of Warburg Dillon Read. Mischou said that the company's first-quarter results were in line with expectations and is maintaining his 1999 EPS estimate of $1.26 and a 2000 estimate of $1.50. He is rating the company a "buy" and is projecting a 12-month target of $33.
forbes.com |
