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Investors’ Ears Perk Up at Audience

Earnings send ADNC flying a few days after Twitter scare


Audience (NASDAQ:ADNC) — the developer of sound technologies for mobile devices — certainly is in a hot market.

And its stock has a case of hot feet.

ADNC’s latest earnings report sent the stock up about 24% by midday Friday — a welcome respite following a couple of huge moves down.

Back in September, Audience stock fell almost 60% in a day after Apple (NASDAQ:AAPL) decided not use Audience’s technology for its iPhone 5. More recently, Audience was the target of a stock manipulation on Twitter. A tweet sent a couple days ago made it sound like a top short seller uncovered evidence that the SEC was investigating ADNC — sending shares down 25% almost immediately — but it turned out to be false.

Despite these distractions, Audience still is thriving.

Fourth-quarter revenues jumped by 115% to $38.7 million, and net income improved from a loss of $5.6 million (14 cents per share) a year ago to a profit of $3.1 million (14 cents). The figures beat expectations for $37 million and 10 cents, respectively.

While Apple might have been a huge loss, Audience has been aggressive in snagging other deals. Some of its recent wins include Google’s (NASDAQ:GOOG) Nexus 10 tablet, Motorola’s Razr I and Huawei’s Ascend D2. And that’s helping translate into positive forecasts — ADNC expects revenues of $43 million to $46 million and earnings of 15 cents to 19 cents, beating consensus forecasts for $31.8 million and 1 cent, respectively.

The strong growth could easily last throughout the year. It looks like Audience’s technology will be a part of the Galaxy S4 smartphone, which is expected to hit the market in April or May — and that could provide even more boost.

Voice technologies are becoming critical for smartphones, especially in app use. And while the market itself is in very early stages, Audience has a history with voice technology dating back to 2000. So it looks like ADNC might be able to ride this momentum for some time.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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