FREMONT, Calif. -- ESS Technology Inc. today upped its estimates for first-quarter sales to a range of $68-to-$70 million compared to a previous forecast of $57-to-$60 million. The digital video and home networking chip supplier also raised its forecast for sales in Q2 to a range of $66-to-$70 million from a previous estimate of $62-to-66 million.
With the increased estimate, ESS is now expecting its revenues to sequentially drop by 16-to-18% from $83.3 million in the fourth quarter of 2001.
"When we gave our initial guidance for the first and second quarters, we were coming off an exceptionally strong fourth quarter and expecting normal seasonality after the hot holiday season," explained Robert Blair, president and CEO of ESS. "What we have seen however is that customer demand has remained unseasonably strong."
Consequentially, the Fremont-based company has increased its Q1 net income guidance to $0.22-to-$0.25 per diluted share vs. a previous estimate of $0.11-to-$0.14. The company is also now expecting a Q2 net income of $0.18-to-$0.22 per share compared to $0.14-to-$0.17 in its previous guidance. In Q4 of 2001, ESS reported a net income of $0.35 per share, or $16.3 million.
Blair said chip shipments continue to surpass expectations in the first quarter. "We attribute this growth in revenue to an exceedingly robust market for DVD and VCD video CD players that began to accelerate in the fourth quarter of 2001 and to an increase in our market share in the DVD market," he said.