MOT Settlement News!
Paste of news story below. The news is (1) case is settled with MOT, (2)MOT will be using POWI products in the future, (3) Settlement will have no beneficial short term beneficial effect on earnings [read: no judgment money to POWI], and (4) revenue for first Q. is roughly 27m (compared to 30m for 4Q-99).
Components 1 and 2 are good news, component 3-4 are not good news. Overall, I am disappointed. Can only guess that the court victory was a little weak, and POWI did not wish to push their luck on appeal. I just wonder how firm the commitment from MOT is to buy in the future, and how valuable the commitment is. Any other reads on the news?
Power Integrations, Inc. (Nasdaq: POWI - news), today announced that it has entered into a settlement agreement involving the patent infringement lawsuit it initiated against Motorola (NYSE: MOT -news) in August of 1998.
Under the agreement, Power Integrations will continue as a preferred supplier of high-voltage power conversion ICs for cellular phone chargers that Motorola manufactures and the companies will work more closely together to develop future generations of cellular phone chargers for Motorola.
``We are very pleased that our differences with Motorola are behind us, and that we can return to the excellent business
relationship we previously enjoyed with them,' said Howard Earhart, president and chief executive officer of Power
Integrations. ``Although we believe that this settlement paves the way for us to achieve long-term revenue expansion with Motorola, it will not have any favorable impact on our financial performance in the near term,' continued Mr. Earhart.
First Quarter Comments
Weaker than anticipated demand is expected to cause first quarter revenue to be between $26.5 million and $27.5 million, below consensus expectations of a flat sequential quarter. ``We remain confident in the fundamental strength of the business and our business model. We will comment on the revenue and the business in general when we report our financial results for the first quarter on April 17, 2000 after the close of market.' said Mr. Earhart. |
