Thursday, November 24, 2011

SENSIO Technologies Quarterly Loss Narrows

SENSIO's Q1 revenues (for the period Jun11-Aug11) were up over 150% vs the previous quarter. The absolute level of revenue is still small, but many of their business lines are just now starting to generate revenues. Upcoming quarters should see nice growth in all business segments, except maybe for Live3D which will probably won't generate much in the way of revenues in Q2. But starting Q3 we should see Live3D revenues pick up again from the UFC 3D events and then (hopefully) the Olympics later in the year. Possibly other big events as well which have yet to be announced.

The CE (Consumer Electronics) segment should see significant growth over the next couple of quarters as Vizio passive 3DTV sales ramp up. I also hope to hear of new licensing deals in the CE segment in the near future (we should get an update on the CC tomorrow morning).

The VOD business line should be launched over the next few weeks which will add yet another revenue generating segment to the company's arsenal (should get an update on this as well during the CC).

Expenses look to have stabilized. They were up vs. a year ago (due mainly to the Algolith acquisition) but down vs. the prior quarter.

SENSIO generated a net loss of .0185 per share for the quarter vs. a loss of .0306 cents in prior quarter.

I think it's a fairly positive report. The company is in transition from being a one-trick pony (Live3D) in 2010/2011 to one with 4 distinct revenue generating units (once VOD is launched). SENSIO should continue to narrow losses over the next 2 quarters if expenses remain stable, and possibly be in a position to turn a profit 3-4 quarters from now. Significant profits if things go really well (eg. new major licensing deals).

We'll see what the market has to say after the CC tomorrow - but in my opinion the share price remains fundamentally cheap (even after a 46% rise in the stock over the last week) given the huge potential for growth over the coming months and years.

Link to SENSIO's Q1 Earnings Report:

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