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    Nasdaq Stock to Watch; OmniVision on the Rebound

    Nasdaq Stock to Watch; OmniVision on the Rebound

    OmniVision Technologies Inc. (NASDAQ: OVTI) shares this morning started a recovery from Friday’s plunge as investors reacted on worries that the chip-maker will lose all or some its iPhone market share.

    OmniVision shares climbed more than 3% at market open after closing down 30.42% lower Friday.

    The worries about loss of iPhone market share were raised after OmniVision, which manufactures chips used in digital cameras and smartphones, provided a weak outlook for the current quarter. The company said that it expects second-quarter fiscal 2012 earnings to come in between $0.52 per share and $0.64 per share and revenue to come in between $255 million and $275 million. This is well below analysts’ estimate of earnings of $0.81 per share and revenue of $306 million.

    The weaker-than-expected current quarter outlook led some analysts to believe that the company may lose some of its share in the up-coming model of the iPhone. According to Rajvindra Gill, analyst at Needham & Co., Apple (NASDAQ: AAPL) is adding another source for imaging chips for the iPhone. In a research note to clients, Gill wrote that it is clear now that Apple is dual-sourcing its image sensors with Sony.

    However, OmniVision attributes the weak outlook to a longer development cycle for on of its product lines and also to a weakening economy.

    OmniVision also released its first-quarter financial results. The company reported first-quarter revenue of $276.1 million, a record and up from $193.1 million reported for the same period in the previous year. The company’s GAAP net income for the first quarter of fiscal 2012 was $42 million, or $0.68 per share, compared with GAAP net income of $16.9 million, or $0.30 per diluted share, reported in the first quarter of fiscal 2011. On a non-GAAP basis, the company reported net income of $47.2 million, or $0.76 per share, compared with $22.4 million, or $0.39 per share reported for the same period in the previous year.

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