Wi2Wi soars after reporting first quarter results

Shares of Wi2Wi Corp (Wi2Wi Stock Quote, Chart, News: TSXV:YTY) are racing today after the company Friday reported its Q1, 2015 results.

Wi2Wi earned (U.S.) 439,000 in the first quarter on revenue of $4.63-million.

The company says most of the revenue bump came from its October acquisition of radio frequency product maker Precision Devices. While Wi2Wi enjoyed the added topline, the pickup also had the effect of lowering its gross margins by nearly half, from 49.8% to from were 28%. Management explained that the devices Precision Devices sells have a lower margin profile than its own wireless products.

“The decrease in margin is due primarily to the precision devices historically yielding a lower margin,” said the company today. “The company is in the process of improving manufacturing yield, increasing efficiencies, optimizing manufacturing batch sizes, successful efforts in manufacturing cost reductions and retaining the ASP of the products. The process will take some time to implement, and initial results are very favourable.”

At press time, shares of YTY were up 55.6% to $0.28.