Legal costs hurt Rambus profit
Reuters
April 15, 2003, 5:17 AM PT
URL: zdnet.com.com
Rambus on Monday said its income fell in the latest quarter due to higher legal costs, even as new contracts with Sony and Toshiba boosted its revenue.
Shares of Rambus, a developer of technology to speed up the performance of computer chips, slipped in after-hours trading to $15.50 from their close at $15.76 on the Nasdaq.
The company's net income fell to $5.1 million, or 5 cents a share, in the fiscal second quarter ended March 31, from $6.7 million, or 7 cents a share, a year earlier. Revenue rose to $28.1 million from $23.5 million, the company said.
For the third quarter, the company expects revenue to be relatively flat at between $27 million and $29 million, Chief Financial Officer Robert Eulau said during a conference call with analysts.
The second-quarter results reflect $3.3 million in contract revenue, up 90 percent over the year-ago period and up 137 percent from the previous quarter. Royalties during the quarter totaled $24.8 million, Rambus said.
Total costs and expenses were $23.6 million compared with $18.9 million in the last quarter and $14.8 million a year earlier, primarily due to higher litigation costs and investments in research and development.
Litigation costs alone were $7.1 million in the quarter, and are expected to be between $5 million and $8 million in the third quarter, Eulau said.
"That's a lot of litigation expenses to incur," said Mike Crawford of B. Riley & Co. in Los Angeles. "They're not receiving payment for all the royalties they are owed."
Crawford, who said he owns some Rambus shares but his firm has no banking relationship with the company, predicted Rambus will ultimately prevail in the cases.
While the semiconductor industry has suffered from its worst downturn ever the past two years, Rambus has funneled money into litigation with rival companies over patents it claims they infringed.
Rivals, including Germany's Infineon Technologies, Micron Technology and Korea's Hynix Semiconductor, claim Rambus fraudulently obtained patented ideas in the course of an industry standards-setting process.
Earlier this month, a U.S. appeals court gave a favorable ruling to Rambus, and a lower court will reconsider Rambus' patent infringement allegations against Infineon.
The U.S. Federal Trade Commission has its own fraud-related lawsuit pending against Rambus. A judge on Monday denied Rambus' motion for summary judgment, Eulau said. The trial in that case is expected to begin April 30, he said. |
