Tessera Technologies Inc
) is set to report third quarter 2013 results on Nov 6. Last
quarter it posted a 7.41% negative surprise. Let's see how things
are shaping up for this announcement.
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Growth Factors this Past Quarter
Tessera's second-quarter 2013 net loss of 30 cents per share was
wider than the Zacks Consensus Estimate of a loss of 27 cents.
Reported revenues of $46.6 million in the second quarter were up
sequentially but down year over year and in line with the Zacks
Tessera remains a company with good intellectual property, which
it has protected with great difficulty. However, management is
keen on shifting to a lower-margin but safer product-oriented
model involving camera modules for mobile devices. The company is
believed to be on the right track as this could reduce if not
eliminate the significant litigation expenses it has been
incurring. The fact that the target market is fast-growing is an
added bonus. It is further believed that the broadening of its
relationship with SK Hynix with new licensing agreements should
help revenues in the future.
For the third quarter of 2013, Tessera expects revenues in the
range of $35 million-$38 million. Intellectual Property revenues
are expected in the range of $30-$33 million whereas Digital
Optics revenues are expected to be $5 million. GAAP operating
expense is expected between $59- $63 million with a tax rate of
Our proven model does not conclusively show that Tessera is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
Zacks ESP: That is because both the Most Accurate estimate
and the Zacks Consensus Estimate stand at a loss of 18 cents.
Hence, the difference is 0.00%.
Zacks Rank #3 (Hold): Tessera's Zacks #3 when combined with an
ESP of 0.0% makes surprise prediction difficult. We caution
against stocks with Zacks #4 and #5 Ranks (Sell rated stocks)
going into the earnings announcement, especially when the company
is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this quarter:
Melco Crown Ent
) with an Earnings ESP of +6.45% and a Zacks Rank # 1 (Strong
) with an Earnings ESP of +7.69% and a Zacks Rank # 1 (Strong
) with an Earnings ESP of +57.14% and a Zacks Rank # 1 (Strong