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MIPS Q2 Earnings Report

|Includes:ARMH, MIPS Technologies, Inc. (MIPS)

Taken from MIPS January 25th, 2011Second Quarter Earnings Report

  • Revenue was $21.9 million, a year-to-year increase of 44 percent
  • Licensee royalty units grew to 173 million units from 126 million units in Q2’10
  • GAAP net income was $6.0 million or $0.11 per share; up $2.8 million year-to-year
  • Non-GAAP net income was $7.5 million or $0.14 per share; up 82 percent year-to-year
  • Cash and investment balances ended the quarter at $101 million, a year-to-year increase of $53 million

MIPS reported EPS of $.14 vs. consensus $.13 in Q2 2011.  

Revenue came in at $21.9 MM vs. consensus $22.3 MM.

The miss was due to lower licensing revenue; 7 MM vs. 9 MM in the prior quarter.

Shares plummeted over 10% in after hours trading.  

This provides an opportunity to gain exposure to the growing chip industry.  If the Consumer Electronics Show is any indication of the future, tablet PCs, smart phones, hand-held devices, and anything mobile will be connected to the internet. While MIPS is playing catch up to market share leader ARM Holding (NASDAQ:ARMH), they are gaining ground in the Android market.  

Seeing how Android is free - whereas Apple's software is not - Android will probably stay the dominant operating system for mobile phones and tablet devices.  MIPS's management has focused on breaking into the Android market and if it succeeds, can be a huge boom to the bottom line.  

MIPS, with a ~760MM market cap might be a great buy-out target for cash rich Intel.
Stocks: MIPS, ARMH