NEW YORK (AP) -- Shares of Ambarella Inc. traded higher Wednesday after the chip designer's first-quarter results surpassed Wall Street estimates.
THE SPARK: Ambarella makes products used for video capture in high-definition cameras. Late Tuesday, it said sales of chips used in wearable sports cameras, Internet-connected cameras, and automotive cameras improved during the quarter. Excluding one-time charges, the company earned 21 cents per share while its revenue rose 31 percent to $33.9 million.
Analysts expected net income of 15 cents per share and $31.9 million in revenue on average, according to FactSet.
THE BIG PICTURE: The Santa Clara, Calif., company's second-quarter guidance was generally higher than expected. Ambarella said it expects $5 million to $6.5 million in adjusted income in the quarter on $34.5 million to $37.5 million in revenue.
Analysts were forecasting income of $5.9 million and $34.7 million in revenue. On a per-share basis they expect Ambarella to earn 20 cents, on average.
THE ANALYSIS: Stifel Nicolaus analyst Kevin Cassidy kept a "Buy" rating on Ambarella shares and raised his price target to $20 per share from $17. He praised the company's consistency.
"Ambarella's exposure to high-growth sports cameras, IP security cameras, and automotive camera markets will serve to stabilize longer term growth," he said.
SHARE ACTION: Shares rose 61 cents, or 3.8 percent, to $16.80 in afternoon trading. Earlier Wednesday the shares peaked at $17.74, close to its all-time high of $17.90. Ambarella's IPO priced at $6 per share in October.