Dolby Laboratories, Inc. (DLB)

NetscribeEntnmnt (62.85) Submitted: 4/27/07 7:46 AM : Start Price: $37.16 DLB Score: 22.30

Dolby is currently observing a strong performance, with 1Q’ 07 revenues registering a rise of 15% to $104.4M. The top line increase can be attributed to higher licensing income generated from improved consumer electronics, PC & broadcast markets revenues, while income from production service is also observing a positive growth. However, it was the bottom line that impresses the most, rising 73% to $29.9M. The surge in net income resulted from improvement in margins, and higher interest income.





The company recently announced acquisition of BrightSide Technologies, a development-stage technology company for $28 million in cash. The target company is involved in enabling the capture, distribution, and display of mass-market LCD TV sets, as well as front and rear-projection TVs. The transaction is expected to be completed in the second half of 2007, and will be an important move for Dolby, as it will enable the company to further diversify from its core business.





It is the company’s continuous thrust for introducing innovative and ground braking technologies that will act as the major growth driver for the company in the future. The Dolby Digital Plus technology for Next-Generation Broadcast Systems and strong adoption of Dolby by latest technologies like Blu-Ray and HD TV sets, augers well for the company, and will enhance its dominance in the sound technologies market. Looking ahead, though the company’s stock has risen by over 75% during the past year, considering its dominant technology, leading position in the industry, and sturdy future outlook, Dolby can be considered as a healthy investment proposition.

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