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Propelled by a surge in demand for its personal media player chips, Actions Semiconductor rang up a double-digit increase in revenues for 2006 and remained one of the industry's most profitable companies despite its origins in the commodity MP3 space.
Actions shipped 24 million system-on-chip devices for PMPs in the fourth quarter and estimated its market share at 50 percent. That helped top off revenues for the year at $170.4 million, up 14 percent from the year before. Its gross margin hit 55.5 percent.
Profits totaled $74.8 million, only a slight increase from $73.6 million the year before. Although the company's top line grew, profits were muffled by a corresponding rise in its cost of goods sold, as well as higher taxes and an 18 percent increase in R&D spending.
"On the technology front, samples distributed earlier this month of our Series 13 with full video functionality have been well-received. The Series 13 product family enhances Actions' competitive position by expanding our higher end product offerings," said Nan-Horng Yeh, chief executive at Actions, in a statement accompanying its results.
"We continued to make excellent progress in broadening and advancing our product mix, with over 60 percent of our fourth quarter revenues derived from sales of our 9 Series. In addition, we have completed the production transition of our products to 0.18 micron process technology, which will help us to maintain our excellent cost profile," he added.
Actions recent success in the low-end MP3 and mid-tier MP4 markets has been the bane of SigmaTel, Inc., which would kill to have the kind of numbers Actions is putting up. The troubled company reported its results last week.
For the full year 2006, SigmaTel reported net revenue of $159.4 million, less than half the $324.4 million that the company posted in 2005. The company posted a GAAP net loss for the year of $109 million, compared with a profit of $35.9 million for 2005.
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