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Technology Stocks : Interdigital Communication(IDCC) -- Ignore unavailable to you. Want to Upgrade?

To: John Cease who wrote (2567)	11/7/1998 6:05:00 PM
From: Bill Dalglish	Read Replies (1) \| Respond to of 5195

Morgan Keegan research notes: Thur Nov 5 Analysts Kasargod, Goetsch & McCourt issued the following "News Story for IDC" which I assume reached clients Friday, today or will reach them early next week. Because the use the notes from the brokerage firm covering IDC (located in Memphis TN close practices are copyrighted by Quotron Systems, I am comfortable with only providing a summary and paraphrase here. Update on Q3:98 results and trends Third quarter results modestly exceeded our expectations for the quarter, based on stronger than expected licensing and alliance revenues and better than expected ongoing cost controls. Based on the new licensing agreement with Denso, we will need to adjust our Q4:98 estimate from a loss of .21/sh on revenue of four million in to a gain of .14/sh (range of .08 to .20/sh) on revenue of $22-23 mil. This would bring the full year to $0.53/share on revenue of 83.9 mil. IDC has reported these positive trends: Denso licensing relationship: agreement is structured in the form of upfront payment for past royalty dUE, with the ability for IDC to obtain a re-occurring revenue stream for additional units sold. Iowa field trial: company indicated that sites planning for the project has been completed and that the field trial should commence this quarter. We believe that fixed wireless is an attractive alternative for competitive local exchange carriers (clecS) to gain local access in certain situations relative to building out capital intensive, fiber-optic networks, especially in world settings given B-CDMA's properties, allowing the provision of high data rate services as well as voice, potential exists for B-CDMA to become a viable technology for providing fixed wireless local loop (wll) in United States. Share buy-back: the company has not yet bought back any shares, but reiterated its intention to do so when feasible. Second generation ASIC: to be manufactured by Texas Instruments, the chip should further improve the cost/performance measure of the technology and be completed by year-end Alcatel has been awaiting this design before offering a B-CDMA based product to their customers. Completion of this product should have positive implications for potential B-CDMA sales moving forward. Standards process: the company remains very active in the standards process for both third generation (3G) digital wireless technologies and domestic fixed wireless loops. On Sept. 21, the company submitted a merged standard for 3G to the international telecommunications union (ITU). ITU is expected to make a decision on 3G by March of 1999. While a number of standards are being considered, IDC'S activity the standards processincreases its ability to inject additional intellectual property into such a standard. Myanmar: IDC's contract remains stalled due to political and economic instability with the company no longer being confident that the contract will be performed over the near-term. Our financial models for 1999 will reflect this uncertainty. We will need to revise our estimates for full year 1999 after further discussions with management. Current expectations is that 1999 revenue will be driven more by licensing an alliance revenue than product. We are currently suggesting .19/sh loss in earnings per share on $66 million in revenue (74 percent from product revenue). It is anticipated that there will be a shift toward higher margin royalty/licensing revenue, positive for the bottom-line. "Overall we are pleased that trends are tracking expectations at the company. While we are mildly disappointed that Myanmar will make no contribution in 1999, other sources of revenue should compensate for this lack of contribution." "We continue to believe that IDC represents a unique opportunity in the wireless marketplace, and that the company's patent portfolio and B-CDMA technology is positioned to provide a shareholder value over the long-term. However, given the lack of visibility in recurring revenues, we believe our 'market perform' rating is appropriate that this time." -------------------------------------------- Note: the report from which this is summarized in paraphrase his copyright Quotron systems. Bill in Tennessee NOTE to new visitors to this SI board: Most of the discussion on UIDC takes place over on the new Raging Bull ( www.ragingbull.com board. Its free. Come visit!