Mellanox becomes takeover target
The future of Mellanox Technologies (MLNX) has become a big subject of speculation in recent months. In October, CNBC reported that Mellanox had hired advisors to explore a potential sale after receiving takeover interest from more than one company. In November, CNBC named Xilinx (XLNX) one of the companies exploring the acquisition of Mellanox. On December 19, a report from the Times of Israel named Microsoft (MSFT) as another company interested in acquiring Mellanox. Neither of these companies has confirmed or denied takeover maneuvers.
Revenue soared 24% at Mellanox
Mellanox is a maker of products used in data centers. It reported its third-quarter earnings in October, delivering what executives called the fifth consecutive quarter of record results. Its revenue rose 24% YoY to $279.2 million in the third quarter and profit rose to $37.1 million from $3.4 million a year earlier. The company guided fourth-quarter revenue in the band of $280 million to $290 million. Since the company reported revenue of $237.6 million in the fourth quarter of 2017, its projections for the fourth quarter of 2018 show it is expecting top-line growth of as much as 22%.
Demand for data center products
Mellanox is benefiting from data center construction as cloud computing companies work to expand their capacity to meet growing demand for their services.