Font licensing and technology company Monotype Imaging ( TYPE ) printed upbeat quarterly results on Friday that sent its stock soaring.
Monotype shares were up 11%, near 26.25, in morning trading on the stock market today . The stock broke out of a 12-week consolidation period with a buy point of 25.87.
Monotype reported adjusted earnings per share of 45 cents, up 275% year over year, on sales of $65 million, up 24%, in the fourth quarter. Analysts expected 8 cents and $62.5 million.
IBD'S TAKE: Monotype Imaging stock has an IBD Composite Rating of 59 out of a best-possible 99. It ranks No. 4 out of seven stocks in IBD's Computer Software-Desktop industry group. To find out which stocks lead the group, visit the IBD Stock Checkup .
For the current quarter, Monotype expects to earn an adjusted 13 cents a share on sales of $55 million, based on the midpoint of its guidance. Wall Street was modeling 14 cents and $55.9 million. For the full year, Monotype expects to earn an adjusted 82 cents a share on sales of $247 million, vs. consensus expectations of 73 cents and $244 million.
"We're pleased with our strong finish to 2017," Monotype Chief Executive Scott Landers said in a news release . "We delivered results above the high end of our guidance range, as well as our highest quarterly organic growth rate since Q2 2011, the second highest in Monotype's history."
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Monotype is broadening its mission, moving from serving graphic designers and creative professionals to providing brand engagement for large companies, Dougherty analyst Steven Frankel said in a report Monday. He rates Monotype stock as buy with a price target of 25.
Meanwhile, Monotype is involved in a proxy fight with Starboard Value, which owns 6.1% of Monotype shares. Starboard has nominated four candidates to serve on Monotype's board.
In response to Starboard's move, Monotype disclosed on Jan. 31 that it had hired J.P. Morgan in July to explore its strategic options, including a possible sale. Monotype approached 28 parties, including 18 strategic and 10 financial. Of those, 10 expressed interest, signing confidentiality agreements and nine received management presentations. However, no definitive offers were received.