Smith Micro Software (SMSI)

Unless you're in prison or Amish, practically everybody these days has some sort of mobile device (usually a phone and/or laptop), and we're demanding more and more from these things everyday. With 3G continuing to expand and 4G gaining momentum, Smith Micro Software, Inc. ( SMSI - Snapshot Report ) is in a good position to capitalize.

As such, it was added to the Focus List on May 12.

A month ago tomorrow, this developer and marketer of software for mobile devices announced a first-quarter report that included substantial year-over-year gains in EPS and revenue.

Though not heavily covered at the moment, earnings estimates shot higher in response, helping it maintain a Zacks #2 Rank ('buy').

However, as impressive as the past has been (including more than 2 years of quarterly EPS that either matched or beat expectations), it is the future of Smith Micro Software that is most intriguing. We currently have a longer-term "Outperform" recommendation on the company, as we believe it is poised for growth due to increased adoption of 4G services as well as acquisitions.

Recently, the company announced that its Adaptive Video Streaming Platform will be used by Terra Networks S.A. to deliver TV content to its mobile users. Terra is the largest Internet company in Latin America and a digital content provider in 18 countries.

First Quarter Report

On May 5, Smith Micro Software announced the highest quarterly revenue in its history of $29.9 million, which was 26% better than last year's $23.8 million. According to the company, top-line growth was again driven by its core wireless and mobility products and services, which were up 40% from last year.

Earnings per share reached 9 cents, soaring past the Zacks Consensus Estimate by 125%. It also easily surpassed the year-ago performance. SMSI has now surpassed quarterly expectations for 5 straight quarters.

The company continues to expect revenue between $125 million and $135 million for 2010.

Earnings Estimates for Smith Micro Software

In response to the first quarter report, every estimate on the company for both this year and next moved higher!

Of course it's important to note that there are only 3 total estimates for each period. Nevertheless, it's always nice to see unanimous agreement among the analysts.

The Zacks Consensus Estimate for this year is 57 cents per share, which is up by a solid 39% from 30 days. ago.

Meanwhile, Smith Micro Software is expected to earn 65 cents per share for 2011, or 14% better than 2010. This Zacks Consensus Estimate has improved by 35.4% in the past month.