Cavium Networks shares jump after 1st-quarter results top expectations

Cavium Networks shares jump after solid 1Q results

NEW YORK — Shares of chip maker Cavium Networks Inc. surged Tuesday after the company’s first-quarter results beat Wall Street forecasts.

The stock jumped $2.09, or 7.7 percent, to $29.42 in midday trading. They earlier set a new year high of $30.39, eclipsing a prior peak of $27.97 set Monday.

Jefferies & Co. analyst Adam Benjamin told clients in a note Tuesday that Cavium is poised for “significant” revenue growth over the next few years, driven by the company’s backlog of successful chip designs. He maintained a “Buy” rating on the company.

Cavium designs semiconductors that help run communications networks. After the market closed Monday, the company posted a narrower loss than in the same quarter a year ago.

Excluding one-time costs, it would have earned 14 cents per share, better than the 11 cents per share projected by analysts, according to a Thomson Reuters survey.