Rambus (RMBS) - Eagle or Penguin Message Board

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Technology Stocks : Rambus (RMBS) - Eagle or Penguin

RMBS 90.56

-4.4%

3:59 PM EST

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To: Estephen who wrote (47519)	7/19/2000 11:57:21 AM
From: Don Green	Read Replies (1) of 93625

Rambus Rakes in the Royalties Fayad Abbasi Jul 19 2000 Rambus [RMBS] reported third quarter earnings yesterday, meeting the Street’s expectations of $0.04 per share. Revenues were up 13 percent from last quarter at $17.8m, boosted by record royalties totaling $6.6m from Rambus proprietary integrated circuits (ICs). We currently have a buy rating on Rambus, but we remain wary of potential legal action from memory manufacturers. During the past quarter, both Hitachi and Toshiba signed licensing agreements to manufacture Rambus products. And although Hitachi signed on as the result of litigation, the company will still provide revenue in the next quarter. Rambus also announced new products this quarter. Quad Rambus Signaling Level (QRSL) technology provides increased memory bandwidth of about twice the current level of RDRAM for personal computers and game consoles. Quad Serializer/Deserializer technology will allow increased bandwidth for network hardware applications. Toshiba has already signed on to produce QRSL technology. While earnings for the quarter weren’t tremendous, we don’t think the Street was anticipating huge numbers just yet anyway. The big royalty numbers should begin trickling in sometime in 2001. Instead, the take-home messages for the quarter were initial numbers regarding ramp in RDRAM production, Intel’s backing of RDRAM, and the haze of legal wrangling creeping up on the horizon. We’ll be watching for any legal action taken against Rambus. If the company cannot continue to collect royalties on its patented SDRAM and DDR SDRAM technologies, it may fall into some trouble. We believe that the lion’s share of revenues will come from the disputed technologies (SDRAM and DDR) until the price of RDRAM falls into a competitive range with conventional technologies.

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