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Acacia Research Corporation Message Board

  • investora2z investora2z Oct 18, 2013 6:58 AM Flag

    Bad earnings

    This is the third time in a row that the earnings have been below par. The revenues declined on a yoy and sequential basis, and the net loss increased significantly. 2013 will be a bad year for Acacia as the company is now carrying a $23 million net loss on a ttm basis, and the revenues are only $181 million. If one considers the nine month figures, the topline for 2013 may be much lower. The reaction to the earnings is not over yet, and the stock may see a few more days of selling before it begins to stabilize. The confidence is much lower, and the fact that the stock has gone below $20 indicates that a much deeper cut could be in store. One could see $15-$16 over the next couple of months. It was imperative for the company to deliver this time, but it failed to do so. The Q3'13 revenues declined by 56% on a yoy basis, and even the sequential decline was more than 32%. The net loss increased to $15.7 million compared to $6.6 million in Q3'12 and $12.5 million in Q2'13. Even the non-GAAP net income fell to $5 million from $6.7 million in Q3'12. In the third quarter of 2013, three licensees individually accounted for 34%, 31% and 19% of revenues, as compared to five licensees individually accounting for 30%, 13%, 10%, 10%, and 10% of revenues recognized during the third quarter of 2012. This points to higher dependence on a few clients for majority of the revenues. The competition in the sector has increased, and there are patent assertion entities like Spherix (SPEX) which are working to increase the diversity of their patent portfolios. Several companies are more aggressive, and hence it is important for Acacia to diversify to smoothen the curve. Even the cash position of Acacia has witnessed some declines.

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