Posted February 4, 2013 by Eric Shirey in Technology

Cavium Surges As Profits Beat Estimates

Northern, WI 02/04/2013 (avauncer) - Fourth-quarter profit and sales of Cavium Inc. (NASDAQ:CAVM), the communications and security chip maker, beat analysts’ estimates. This caused its stock to rise to a three-month high. The company’s fourth quarter sales and earnings eclipsed analysts’ estimates.

The 6% advance was the biggest since Oct. 31. Climbing over 10 percent in the last 12 months, the stock closed at $35.46.

Innovative and speedy chips are the need of the hour as computing tasks are to be handled more securely and remotely by the systems. These chips have made it possible to collect and analyze an increased quantity of data for the companies.

 According to Alex Gauna, an analyst, Cisco Systems Inc. (NASDAQ:CSCO) placed fewer orders for these chips. However, this void was filled by Palo Alto Networks Inc. (NYSE:PANW) and Citrix Systems Inc. (NASDAQ:CTSX). Cavium now has a more diverse customer base.

Cavium has been rated as a hot “buy” by Alex, keeping a price target of $38.

Analysts had put the fourth quarter profit at 17 cents. However, it exceeded exceptions to record a profit of $0.20 (i.e. 20 cents) per share. Revenue generated was close to $66.4 million, as against the analysts’ estimate of $66.1 million.

The recent boom in the cloud-computing industry will see Cavium’s multi core processor playing an important part in sales.

Stock prices:

The shares of Cavium Inc.(NASDAQ:CAVM) were down by 0.55% and currently trading at $35.26.

The shares of Palo Alto Networks Inc.(NYSE:PANW) were down by 2.15% and currently trading at $53.24.

The shares of Citrix Systems Inc.(NASDAQ:CTXS) were down by 1.72% and currently trading at $72.77.

The shares of Cisco Systems Inc.(NASDAQ:CSCO) were down by 0.17% and currently trading at $20.80

Eric Shirey

Eric Shireya is a former newspaper section editor and reporter who has been reporting on Fashion and Lifestyle for about 10 years. His work has been published in national business trade magazines, and can be found on wire services, in daily newspapers, in university alumni magazines, on the web, in newsletters, and more. His career highlights have included interviewing Bob Hope, laughing through a phone conversation with Richard Simmons, chatting with Melissa Etheridge, and enduring a press conference in a hot air balloon.