Rambus beats earnings expectations
By Janet Haney, CBS MarketWatch
Last Update: 5:04 PM ET Oct 14, 1999 Silicon Stocks
Hardware Report
MOUNTAIN VIEW, Calif. (CBS.MW) -- Shares of Rambus could get a boost Friday after the maker of high-speed chip-to-chip technology reported fourth-quarter earnings 2 cents better than expected.
Rambus shares are down 37 percent from its 52-week high of 117 1/2, achieved in mid-July.
The company said Thursday it earned $2.7 million, or 10 cents a share, compared with $1.7 million, or 7 cents per share in the year-ago quarter.
The consensus estimate, projected by analysts at First Call, was 8 cents a share.
Sales in the period were $12.3 million, an increase from the $9.7 million reported in the year-earlier fourth quarter.
Rambus (RMBS: news, msgs) shares rose 1 9/16, or 2.2 percent, to close Thursday at 72 3/4.
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10/14/99 3:04:18 PM ET
"Rambus' quarters have never really been, in my mind, that material," said Seth Dickson, an analyst at Warburg Dillon Read. "It's kind of like a one day event. The majority of the royalties that they're receiving today is from Nintendo 64. It's before the ramp up begins for the Christmas season."
Nintendo uses Rambus technology in its Nintendo 64 video game system.
Dickson said Warburg's estimate was 6 cents for the quarter.
The Mountain View, Calif. company offered no reasons behind its strong earnings report. See press release.
Under pressure
Rambus shares have searched for direction lately amid concern that Intel's transition to using Rambus' memory chips will be slower than expected. Rambus licenses its designs to chip makers, including Intel (INTC: news, msgs), NEC (NIPNY: news, msgs) and South Korea-based Samsung Corporation.
Yet, in early September, Intel said it's "firmly committed to direct RDRAM [Rambus DRAM] as the memory of the future." See related story.
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