Rambus Posts Higher Revenues, but Has to Pay Legal Bills
By Bill Snyder
Staff Reporter
04/14/2003 05:39 PM EDT
a maker of specialized computer memory devices, boosted second-quarter revenue by 19% year-over-year, but saw earnings decline somewhat because of increasing legal and research expenditures, the company reported Monday.
Net income for the March quarter was $5.1 million, or 5 cents per share, compared to $6.7 million, or 7 cents a share, for the comparable period a year ago. Revenue was $28.1 million, compared to $23.5 million a year ago.
The company has been embroiled in a complex series of civil suits and administrative actions regarding patent rights to its flagship fast-memory products. Last week, a federal appeals court denied a request from German memory maker Infineon Technologies (IFX:NYSE ADR - news - commentary - research - analysis) to revisit the court's split decision dropping fraud charges against Rambus, thus freeing the company from allegations that it improperly influenced a standards-setting organization to adopt its patented memory technology.
The company has won several other legal skirmishes recently, but still faces a trial in front of the Federal Trade Commission beginning April 30, as well as a number of private suits. Analyst Mike Crawford of B. Riley & Co. said the courtroom wins make it more likely that Rambus will eventually prevail with the FTC and begin to collect significant royalty payments from companies, including Infineon, Hynix and Micron (MU:NYSE - news - commentary - research - analysis). Those royalties could add several dollars a share to future earnings, he said, noting that possible back royalties would drive income even higher. His firm does not have an investment banking relationship with Rambus.
Rambus' earnings results were in line with estimates made by Crawford, currently the only Wall Street analyst rating the company, while revenue was a bit higher.
Looking forward to the third quarter, the company said it expects revenue to range from $27 million to $29 million. But citing uncertainty over potential legal expenses, Rambus declined to project earnings per share for the quarter.
Shares of Rambus gained 32 cents, or 2.1%, to $15.76 cents on Monday. |
