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Dolby Extends Dolby Vision & Atmos for Old & New Partners

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At the ongoing consumer electronics and technology tradeshow, CES 2017, Dolby Laboratories, Inc. (DLB - Free Report) , in collaboration with technology frontrunners, is showcasing next-generation imaging and audio solutions.

Of late, the company’s Dolby Vision and Dolby Atmos, both have been acting as major profit churners. The forming of partnerships is the company’s strategy to leverage on core strengths to foray into new domains and gain greater market traction.. Encouragingly, over the past one year, the stock has charted an impressive growth trajectory returning 51.5%, much better than the Zacks classified Audio Video Production industry return of 22.9%.

This premium audio, video, and voice technology provider has teamed up with biggies, including Lenovo, LG, P&F USA (Philips), Sony Corporation , and TCL, to advance services into domains like broadcast, over-the-top (OTT), Ultra HD Blu-ray, gaming, and music. In the show, Dolby announced that LG's 2017 OLED televisions will feature its proprietary Dolby Vision and Dolby Atmos technology for the first time, boosting customer experience.

Dolby has strengthened old ties and made new ones with premium television makers, like TCL, LG, Philips and Sony. The latest addition to Dolby Vision’s kitty include LG's newly announced OLED lineup, LG Super UHD TVs, Philips’ branded 4K Ultra HD televisions and Sony’s premium 4K HDR TV line. This raises the total number of television original equipment manufacturers featuring Dolby Vision to seven.

Dolby’s partners declared that their upcoming offerings, including Philips’ 4K Ultra HD 6000, 7000, and 8000 series televisions and TCL’s C-Series and P-Series TV, will feature Dolby Vision, moving ahead. This apart, the new Ultra HD Blu-ray player from LG and BDP7502 4K Ultra HD Blu-ray player from Philips have also selected Dolby Vision. In addition, entering into 2017, Dolby’s other businesses, including content creation, distribution and playback, also look promising.

For instance, Dolby Vision content has been witnessing a stellar demand from “On-demand streaming” services, with more than 80 titles currently available. At present, over 100 hours of original content is available on Dolby Vision, across major OTT providers. The company announced that customers will soon have access to a library of Dolby Vision content on Ultra HD Blu-ray.

Similar to Dolby Vision, Dolby Atmos’ momentous market traction is also stoking the company’s top-line performance. LG’s new SJ9 soundbar, Sony’s HT-ST5000 soundbar & STR-DN1080 AVR and Lenovo’s premium gaming laptop Lenovo Legion Y720, have lined up to Dolby Atmos, for enhancing their sound qualities.

Additionally, the company has a decent earnings surprise history, beating estimates thrice over the trailing four quarters. It should be noted that brokers are on the sidelines for this Zacks Rank #3 (Hold) stock as its earnings estimates remained unchanged over the past 30 days. The Zacks Consensus Estimate for full-year 2016 also remained unchanged at $1.89, over the same time frame. We believe that the recent collaborations and robust pipeline of future demand will prove conducive to both top- and bottom-line performances over the long term.

Stocks to Consider

Better-ranked stock in the space include Central Garden & Pet Company (CENT - Free Report) and Belmond Ltd. . Both stocks hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Central Garden & Pet Company has a whopping average earnings surprise estimate of 72.5%, beating estimates each time over the trailing four quarters.

Belmond has an impressive average earnings surprise of 108.6%, having beaten estimates thrice over the trailing four quarters.

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