DivX (DIVX-NASDAQ) has shown that licensing media compression players is not a bad model at all, although the gains in after-hours turned into losses in a hurry. The company posted 80% revenue growth for all of 2006, but the company posted Q4 EPS at $0.21 and net income at $7.4 million on revenues of $16.4 million. That is up from $0.03 and $2.2 million in Q4 2005. This looks above the street estimates, but calling for estimates on a company that has been public only a few months is more "ranging" than it is science. Its annual net income for 2006 was $16.4 million and EPS was $0.61. For the first quarter of 2007, revenue is anticipated to be in the range of $17.3 to $19.3 million.
The initial reaction was up 4%, but now shares are down more than 4% to $22.65 in after-hours. This is a recent Hot IPO so it probably isn’t a shock to see all the volatility in the name. DIVX closed up 1.1% at $23.69 on only half its normal volume ahead of the report. Its market cap at the close was $778 million.
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