Rambus (RMBS) - Eagle or Penguin Message Board

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Technology Stocks : Rambus (RMBS) - Eagle or Penguin

RMBS 101.61

+2.8%

Dec 5 9:30 AM EST

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To: Dan3 who wrote (28714)	9/4/1999 3:12:00 PM
From: grok	of 93625

RE: <There is an upside ceiling but no downside floor.> Dan, there is a long pipeline delay (latency?) in Rambus financial results. Whatever the outcome of the near term scrambling turns out to be it won't be announced financially until April. Here's why: FY98 EPS was $0.28 and consensus FY99 (ends this month) estimate is $0.30 which is not much higher. Remember, of course, that Rambus receives their royalty payment in the quarter after the drdram ships. So there will be no drdram royalties in FY99. The $0.30 in FY99 will be all License fees and Engineering Services except for the royalties on the Concurrent Rdrams in the Nintendo64 (the only Rambus design win in the pre-Intel-sledgehammer days). So the $0.30 is probably in the bag and is not affected by any of the scrambling going on at this time. The same thing will be mostly true next quarter since there will be very few drdrams actually shipped in September to generate royalties next quarter and so consensus EPS is only $0.06 which will likely be met also. The real test comes in the Mar quarter when everything shipped in Oct/Nov/Dec hits Rambus' books (or doesn't hit them). So we'll find out next April what really happened. By the way, consensus FY00 estimate is $0.79 and the 1st quarter is only $0.06 so there will have to be a steep ramp in Q2-Q4 (Jan-Sep). Perhaps the best early indicator of trouble would be if the $0.79 estimate starts getting cut. I'm going to be watching real carefully because I'm long. Even though I generally believe that Rambus will win out in the long term I'm worried about bumps along the way.

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