SAN DIEGO—Novatel Wireless Inc. offered upbeat preliminary results for the third quarter, including revenues and earnings per share that the company expects to exceed previous guidance.
The company expects revenues to be between $53 million and $55 million. Earnings per share are expected to come in between 3 cents and 4 cents. Previous guidance predicted revenues of between $51 million and $53 million and EPS of between 2 cents and 4 cents.
In the third quarter the company said it expects HSDPA revenue to show 40-percent sequential growth, largely as a result of its ExpressCard and embedded strategy in Europe. Novatel also noted it experienced significant growth in embedded module sales, which represented about 15 percent of total revenues during the quarter.
Novatel said it will release full results Oct. 24.
CIBC World Markets raised its estimates on the company following the preliminary results. For 2006, the firm expects Novatel to report revenues of $204.3 million, up from $200.8 million. Its 2006 EPS estimate of 16 cents remains unchanged. For 2007, CIBC predicts the company will report earnings of 49 cents per share on revenues of $255.2 million, up from earnings of 48 cents per share on revenues of $248.6 million.
“We are encouraged by the stronger-than-expected embedded ramp and remain comfortable that this will be Novatel’s top growth catalyst over the next several years,” said CIBC analyst Ittai Kidron. “We see recent concern over the threat of new competition from Nokia/Intel as an overreaction.”
Novatel’s stock was down slightly after its announcement to $9.32 per share.
