Smith Micro Shares Up on Design WinThursday, February 23, 2012
Shares of Smith Micro Software Inc. got a boost Thursday after the Aliso Viejo company announced a design win with a big cell phone maker.
Investors sent thinly traded shares up more than 14% to a market value of about $94 million on word the company’s software will be used in Japan-based NEC CASIO Mobile Communications Ltd.’s first rugged Android phone sold through Verizon Wireless, a unit of New York-based Verizon Communications.
The software used in NEC’s G’zOne Commando is billed to simplify phone functions with one-click wireless access, boosting performance, sound quality, reliability and quicker talk time.
Smith Micro makes software for cell phones and connecting mobile devices to wireless networks.
The news of the deal comes a day after the company reported disappointing earnings for the fourth quarter and the year.
Smith Micro reported revenue in the recently ended quarter of $11.2 million, down 68% from a year ago and missing Wall Street estimates.
Analysts on average had forecast sales of $13.6 million.
It recorded a loss of $4.2 million in the December quarter, compared to an adjusted profit of $13 million a year earlier.
For all of 2011, Smith Micro posted revenue of $57.8 million, down 56% from 2010.
It recorded a loss of $23.9 million, compared an adjusted profit of $33.9 million a year ago.
“Despite lackluster results in 2011, we believe we have repositioned the company to capitalize on a growing list of 2012 sales opportunities,” Smith Micro Chief Executive William Smith Jr. said.
Last month, the company announced that Kansas-based Sprint Nextel Corp. will use its software to ease traffic between its 3G mobile and Wi-Fi networks.
The software, dubbed Mobile Network Director, allows Sprint to change network selections on customer devices as they move between coverage areas. The software can also can turn and off different radios, saving battery life during Wi-Fi use and signal searches.
The Business Journal reported in October that Smith Micro planned to cut about 20% of its work force—more than 100 employees—and close some offices as part of a restructuring plan.
The cuts were needed “to bring the company’s operating expenses better in line with revenues,” according to a filing with the Securities and Exchange Commission.