If there has ever been a battered and tattered tech stock, UTStarcom Inc. is the epitome of that. Almost miraculously, the company has raised guidance and shares are soaring.
The company has put guidance for first quarter revenues in the range of $580 million to $590 million. This compares to initial guidance of $500 million to $520 million. The company also hiked up gross margins to be in the range of 15% to 16%, above the prior guidance of approximately 13%.
UTStarcom says this is due to better than expected performance from its personal communications unit and from its core business units.
One thing that is up though is operating expenses, which are now at $120 to $125 million instead of $115 to $120 million (due to unanticipated professional services expenses).
Revenue in the first quarter of 2007 was $475.9 million, and operating expenses in the first quarter of 2007 were $127.5 million.
We featured this at the start of the year as a "turnaround that hadn’t turned around" yet. Maybe this is the start.
Shares of UTSI closed up 0.9% at $3.36 today, but shares are up 19% at $4.00 in after-hours trading. The 52-week trading range is $2.23 to $7.47. This was above $10.00 less than 18 months ago, and this above $30 and even $40 back in late 2003 and briefly in 2004 before its problems kicked in.
Jon C. Ogg
May 6, 2008