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Tessera Technologies Inc. Message Board

  • rumsfeld_rocks929 rumsfeld_rocks929 Jun 3, 2010 8:23 AM Flag

    Preannouncement & Cowen

    The Cowen presentation was very upbeat and interesting. Not a lot new except that TSRA did say that the Optics market opportunity is larger than anticipated (100's of millions)and that TSRA is very satisfied with Silent Air Cooling developments (there are size and shape benefits in addition to the silence benefit). I urge followers of this Board to listen to the conference call replay - it is only 30 minutes long and is a good capsule of the Company. One problem is that the audio to the Questions portion (usually my favorite part) was either cut off or there were no questions).

    - Rummy

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    • the deliberate mis-spellings are splitting my sides

    • Okay presentation. Some serious rough spots.

      For the silent cooling: radical shapes is the new part; thinness was the price of admission.

      The business early about the upward revision having nothing to do with incentive contracts begged the question of whether increased overall activity will make the incentives kick in earlier (I think it will, but probably not enough earlier to cross a quarter break).

      Backing off on $100MM optical business by 2011 can't be received well.

      There is an apparent disconnect between present pilot-scale manufacturing and a mostly-product imaging/optical business of the projected size. A little more color there would have helped.

      Given the present state of legal actions, I was extremely happy that Mr Nothaft said nothing about them. You don't want to appear to take a judge for granted during deliberations.

      My impression of these sponsored conference presentations is that there are rarely many questions on the spot; the questions are deferred to break-out sessions which aren't recorded (and therefore management is not very forthcoming).

    • By the way, there was more large volume action in the January $17.50 calls yesterday - this time the open interest went down by appx 1,000 contracts and most of the trading was near the end of the day at $3.90.

      - Rummy

    • Here are excerpts from the BofA notes:

      􀂄 Tessera pre-announces June quarter revenues positively
      Tessera pre-announced June quarter revenue positively. The revenues are now
      expected to be $74-75M versus prior guidance of $67-70M. The upside was
      driven by a broad based pick up in micro-electronics royalty and license revenue
      with limited benefit from one time items (we estimate less than $1M) or any single
      customer. While the improved microelectronics revenue is a positive, the lack of
      any indication of a material acceleration in optics revenue keeps us on the
      sidelines. We are increasing our estimates as we believe the step up in
      microelectronics revenue will persist as semi unit volumes increase but we leave
      our $22 PO unchanged as peer multiples have compressed.
      No change to Imaging & Optics outlook
      We maintain our CY2011 imaging and optics outlook of $60M (no material
      contribution from Siimpel). We believe increasing traction in imaging and optics
      business is the key to further upside to the stock.
      Adjusting estimates, no change to PO, maintain Neutral
      Semiconductor peer multiples have compressed. We expect TSRA stock to
      continue to trade at a discount to the 13-14x CY2011E that pure semiconductor
      comps trade for due to the risks associated with the volatile nature of legal-related
      expenses and outcomes. We apply a 10-11x multiple (20% haircut) on CY11E
      operating EPS of $1.20 and adding back cash to give us our $22 price objective.
      Given the lack of upside potential or growth catalysts, we maintain our Neutral
      rating.

      - Rummy

    • Here are some highlights of the Barclays notes regarding the preannouncement:

      Investment Conclusion
      We continue to see shares grinding gradually
      higher on solid Microelectronics fundamentals, an
      attractive longer-term outlook for the Imaging &
      Optics segment, and attractive valuation (9x/7x
      our CY10/CY11 EPS ex net cash of $9 per share).
      Summary
      􀂉 This morning TSRA positively pre-announced 2Q
      revs, with the Microelectronics rev guide raised to
      $65-65.5M on broadbased strength across
      TSRA’s licensees (previous guide $58.5-60.5M)
      and Imaging & Optics rev guide raised to $9.0-
      9.5M primarily on Micro-Optics/litho strength
      (previous guide $8.5-9.5M).
      􀂉 With stronger than anticipated wireless and DRAM
      shipments in 1H10, we anticipate TSRA’s 3Q
      royalties to trend seasonally higher, augmented by
      a ~$6M payment from UTAC, partially offset by
      the 2 DRAM volume discounts kicking in slightly
      earlier than in 2009.
      􀂉 We raise our 2Q revs/EPS to $75M/$0.27 (cons
      $69M/$0.21), CY10 to $296M/$1.10 (old
      $283M/$0.95, cons $284M/$0.98) and maintain
      CY11 of $330M/$1.45 (cons $332M/$1.38).
      􀂉 Potential catalysts include: potential ionic cooling
      licensee win, update on contract renewals with 4
      small licensees, determination of Hynix trial date.

      - Rummy

 
TSRA
36.84+0.42(+1.15%)Dec 26 4:00 PMEST

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