Dolby Laboratories (DLB) engages in the development and delivery of products and technologies for the entertainment industry. The company offers products comprising traditional cinema processors, digital cinema products, digital 3D products, digital media adapters, broadcast products, and live sound products, which are used in content creation, distribution, and playback. It also licenses a range of technologies, which are used in DVD players and personal computer DVD playback software; digital televisions, set top boxes, portable media devices; and consumer electronic products, such as gaming systems and audio/video receivers.
Dolby sells its technologies, products, and services through its sales staff and distributors primarily in the United States, Japan, China, Taiwan, and Europe. The company was founded in 1965 and is based in San Francisco, California.
The company has solid fundamentals with great return on equity and solid earnings growth.
The latest earnings for Dolby showed total revenue of $163.1 million, compared to $129.0 million for the fourth quarter of fiscal 2007, an increase of 26 percent. Fourth quarter net income was $48.6 million, or $0.42 per diluted share, compared to $44.2 million, or $0.39 per diluted share, for the fourth quarter of fiscal 2007.
For fiscal year 2008, Dolby reported total revenue of $640.2 million, compared to $482.0 million for fiscal year 2007, an increase of 33 percent. Net income for fiscal year 2008 was $199.5 million, or $1.74 per diluted share, compared to $142.8 million, or $1.26 per diluted share, for fiscal year 2007.
The stock is showing a potential Elliot Wave-5 buy, projecting gains into the $37.50 per share over the next few months. Dolby Labs does have an options market that currently extends out to June of 2009, allowing the options strategist enough time to take advantage of the forecasted opportunity.
Figure 1: Daily Elliott Wave-5 Buy Pattern for Dolby Labs
(Source: Profit Source)
Happy Trading.
Jeff Neal
Senior Writer, Options Strategist & Profit Strategies Radio Show Market Correspondent
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