Dolby Labs is booming – but quietly
Dolby Labs is best known for its noise reduction technology and the clever stuff it does with surround sound in movie theatres and homes. An investment summary from Beacon Equity Research quotes an “outperform” guide on the company’s prospects.
Dolby Labs (NYSE, as DLB) develops, manufactures and markets products to the entertainment industry, which include DVD and Blu-ray players and software, cinema processors, gaming systems, audio/video receivers, digital media adapters, digital 3D products and other consumer electronics products. DLB cinema products are used by movie houses and broadcast media worldwide. But the company has plenty of rivals, especially in the cinema, not least DTS, Sony Corp and SRS Labs.
For the second quarter of fiscal 2009 ended March 27, DLB posted revenue of $204.1m, up 18% from $172.6m for the same quarter last fiscal year. The company cites revenue derived from digital cinema, which was deferred from previous quarters. Net income for the quarter reached $69.5m, or 60c per share, compared with $56.8m, or 49c per share, for the same period 2008.
As of the quarter close, the company reported $725.5m in total current assets for the second quarter, compared with $549.4m from the first quarter ended December 26, 2008. The Company’s Book Value is $10.58. Its Current Ratio is 4.90. Debt-to-Equity is nearly zero. Other vital financial statistics include a net profit margin of 34.8%; return on equity of 22.6%. For the past five years, DLB’s compounded net earnings growth reached nearly 38% per year. Industry analysts see this growth rate dropping by less than 20% for the next five years, with stronger growth expected from Asia, but slower growth expected from OECD countries.
Analysts polled by Thomson Reuters, and quoted by Beacon, expect DLB to “Outperform,” with five analysts recommending the stock a “Buy”. Three analysts expect DLB to “Outperform,” no change in the number of analysts from last month. Five analysts rate DLB a “Hold,” no change in the number of analysts from last month.