CSP Inc. | $CSPI Stock | Shares Shoot Up On Positive Earnings & Revenue Numbers





CSP Inc. (CSPI), an IT solutions company yesterday reported their fiscal third quarter 2016 financial results. CSP reported third quarter earnings of $0.32 per share which was a 457% increase over the previous year’s third quarter. CSP reported third quarter revenues of $26.9 million which was up from the previous year’s third quarter of $22.3 million  


CSP Inc. CEO’s Comments

“We performed well on both the top and bottom lines in the third quarter, as we continue to make excellent progress against our operational and strategic initiatives,” said President and Chief Executive Office Victor Dellovo. “Sales were up 21% in the third quarter, and we reported EPS of $0.32 versus $0.07 a year ago.”

“In the High Performance Products Division, we received royalty revenue for three E-2D planes, as well as additional revenue from parts shipments to support future E-2D plane builds.  Separately, we received product revenue from an existing international customer. In Q4 we expect to receive royalties from one E-2D plane, in line with our initial projections.

“In addition, our legacy Myricom product line, known as the Myricom ARC Series C-Class, continues to perform very well. During the quarter, we fully launched our next-generation FPGA network adapter product, branded as the ARC Series E-Class. The product has the industry’s best combination of high functionality along with low latency; which is crucial for the finance community focused on automated trading. For the remainder of fiscal year 2016, we are concentrating on ramping up the adoption of our ARC Series of 10GbE network adapters, not only in the finance markets but also in the packet capture and video broadcast markets.

“At our Technology Solutions Division, our core strategy continues to be increasing sales of managed services to generate higher-margin profits,” said Dellovo. “We are seeing steady progress on this front in the U.S. We are closing managed services deals at a greater frequency and the recurring revenue stream is increasing. In Germany, we are making tactical changes to drive higher managed services sales to augment the already strong advanced security sales. In the reorganized U.K. business we are focused on building our sales pipeline while improving efficiency to drive better profitability.

“Looking ahead, we continue to be encouraged by the progress we are making in executing on our strategy across our businesses,” concluded Dellovo. “While we still have much work to do, the most significant changes to transform the business are in place, and we are beginning to see positive results and are looking to continue our momentum in Q4 and into fiscal 2017.”  Globe Newswire


CSPI Technical Analysis

CSPI opened trading yesterday at $8.31 which was up from the previous days trading of $8.25. CSPI closed trading yesterday at $8.35 and spiked up after market to $9.95, equivalent to a 19% increase from the closing price. Taking a look at the daily chart we can see the last time CSPI traded above these levels we have to go all the way back to August 2007 when it traded at highs of $10.40. Taking a closer look at the daily chart we can see that  CSPI had been in a upward trend dating back to May 9th when it traded at $6.10. CSPI has a float of 3.01 million shares and traded 1.41 times the normal daily trading volume on Thursday. For trading purposes, I would like to see CSPI open trading on Friday above $9.40 and if it does I would be looking to take a long position at the bell. My stop loss would be $0.20 from my entry position fearing anything more than that and the stock would start to fill in the gap up.


Company Profile

CSP Inc., together with its subsidiaries, develops and markets IT integration solutions and cluster computer systems to commercial and defense customers in the Americas, Europe, and Asia. The company’s High Performance Products segment offers computing systems for digital signal processing applications in the defense market; Ethernet adapters and application software for various applications in packet capture, financial transaction, broadcast video, and media markets; and network adapters for use in automated trading and network monitoring applications. Its Technology Solutions segment provides computer managed and integration services; and third-party computer hardware and software value added reseller services to various customers in Web and infrastructure hosting, education, telecommunications, health services, distribution, financial and professional services, and manufacturing industries. This segment also offers professional IT consulting services, such as implementation, integration, migration, configuration, installation, and project management services; unified storage platforms; virtualization solutions; enterprise security intrusion prevention, network access control, and unified threat management services; IT security compliance services; unified communications, wireless and routing, and switching solutions; custom software applications and solutions development, and support services; maintenance and technical support services; and managed IT services, such as monitoring, reporting, and management of alerts for the resolution and preventive general IT and IT security support tasks. This segment provides its professional services for IT environments, including security, unified communications and collaboration, wireless and mobility, and data center and network solutions. The company markets its products and services through direct sales force and third-party distributors. CSP Inc. was founded in 1968 and is headquartered in Lowell, Massachusetts.  Yahoo Finance