) posted fourth quarter 2012 adjusted earnings per share (EPS) of
3 cents, much better than the Zacks Consensus Estimate of a loss
of 12 cents per share. Adjusted EPS excludes other patent
royalties received, acquisition costs and retention bonus,
amortization, costs of restatement and related legal
Rambus reported total revenue of $57.4 million in the fourth
quarter, down 31.1% from $83.4 million a year ago but was within
the company's guided range of $$57.0 million and $63.0 million.
The year-over-year decline was mainly due to a decrease in the
contract renewal process, coupled with lower royalty revenue and
lower license agreement.
Royalty revenue fell 30.7% year over year to $57.3 million.
Revenue from Contracts was $0.2 million, down a substantial 76.2%
from the comparable quarter last year.
Total operating expenses in the fourth quarter were $61.5
million, up 39.4% from $101.5 million in the year-earlier
quarter. The decline in operating expenses was due to higher cost
rationalization, with a major cut in marketing, general &
Reported operating loss in the quarter was $4.03 million
compared to an operating loss of $18.1 million in the year-ago
quarter. Operating margin was (7.0%) compared to (21.7%) in the
Reported net loss was $16.1 million or 14 cents per share
compared to a net loss of $28.7 million or 26 cent in the
comparable quarter last year. Excluding the impact of other
patent royalties received, acquisition costs and retention bonus,
amortization, costs of restatement and related legal activities,
and non-cash interest expense on convertible notes but including
stock-based compensation expenses, adjusted EPS came in at 3
cents versus 2 cents in the year-ago quarter.
Rambus exited the quarter with cash, cash equivalents and
marketable securities of approximately $203.3 million, up from
$207.1 million in the prior quarter, based on a slight decline in
For the first quarter of 2013, the company expects customer
licensing income to be between $60.0 million and $65.0 million
and revenues between $58.0 million and $63.0 million.
Pro forma operating expenses, which exclude restructuring
charges, stock-based compensation, amortization of intangible
assets and retention bonuses, are expected to be between $51.0
million and $46.0 million. These amounts include an estimate for
litigation expenses between $2.0 million and $3.0 million. Pro
forma net income is expected to be in the $4.0 million to $10.0
We are encouraged by Rambus' fourth quarter results as the
bottom lines surpassed the Zacks Consensus Estimates. The company
also provided decent guidance for the first quarter 2013.
The company has a restructuring strategy in place and we look
forward to the success of this restructuring, but note the
continued loss of legal suits against its top customers such as
) and sluggish demand from the semiconductor companies are
Rambus is going through a recovery phase and expects the
remainder of 2013 to be beneficial. We also notice that Rambus is
doing well in the Lighting and Display category. In fact, the
company mentioned enormous growth prospects in the LED arena. The
company's business strategy is slowly shifting toward LED to
capitalize on the imminent opportunity in LED.
Currently, Rambus has a Zacks Rank #1 (Strong Buy).
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