Story headlines are that Q1 will be sequentially down from Q4, but higher than 1 yr. ago Q1. Additionally, job cuts are in the smaller, by far, revenue division. Cash on hand amounts to nearly half the share price. Back out the PE after cash, and we are below a 10 PE.
Management has not done any favors to themselves by waiting till the markets close to hold their conference call. However, when they return from golf, they have some explaining to do and perhaps they ought to issue a press release on a buyback, resignations, or both. What companies would be interested in buying this firm? I imagine this could be a great deal for the right partner given the cash this company has on hand.
I've been nothing but a casual observer here for that past two years after having been in TSRA since Day 1 and still have no ax to grind, but I think it's a mistake to dismiss the job cuts as inconsequential because they're from the "smaller, by far, revenue division." It seems to me that this confirms a faltering, or slower than anticipated, conversion of the company from chip IP company to a strategically planned for future as an Image and Optics technology company. Couple that with my interpretation of IP customer's willingness to not pay or renew their licences as a flaw in the premise that TSRA will successfully be able to bundle their expiring patents with other IP to effectively minimze their present day exposure to important patent expirations and I think it's difficult to not be concerned... Apologies to my long time long friends on this board, but this is my opinion... I could very easily be wrong...
Over-reaction is mildly putting it....it's ridiculous if you ask me.
"Tessera Technologies Inc.'s (TSRA) fourth-quarter profit more than doubled as revenue surged and margins widened. Shares were down 2% to $20.79 after hours as the chip-packaging technology developer forecast first-quarter revenue of $65 million to $68 million, trailing the $73 million average estimate of analysts polled by Thomson Reuters. Tessera said the prediction.
The company also said it expects to reduce its worldwide employee base by up to 15% as part of a reorganization of its imaging and optics business. It expects to take a $2.5 million to $3 million charge to its current-quarter results from severance and related costs. "
Margins and revs surged, the 15% workforce reduction will cause as much as a $3M hit, plus the 5 deadbeats that have stiffed them on royalty payments - if it weren't for those issues they'd have been right up at the stupid analyst estimates for Q1.
How about the fact that existing customers have refused to pay. What if all decide not to pay. TSRA's whole business model is based on royalty payments. It's one thing to deal with guessing the semi cycle, but this kind of situation creates too much uncertainty. Funds prefer to sell and move into "sure" things like RVBD, APKT, ARMH, etc