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Tessera Technologies Inc. Message Board

  • jacosa jacosa Mar 2, 2012 11:12 AM Flag

    Mixed message of 3/2/12

    So today the company gave an earnings warning for the quarter and instituted a dividend. Legal expenses are expected to remain steady. What are we to make of this?

    The earnings shortfall was expected by followers of the company. Packaging volume in the key DRAM business is off and on top of that a couple of important licensees aren't "playing nice." The xFD initiative is promising for year-end on the assumption that DDR4 will remain mired in company politics [there are 2 different versions being pushed to market](although it would probably be better for TSRA in the long run if it was approved sooner). But potential customers aren't likely to flock to xFD until mid-year. Extermely high connection density packaging is starting to show up in quantity, but even if a lot of it uses uPILR [something we can't know yet], revenues from that are a couple quarters away.

    Dividend is a surprise. I like it.

    Steady legal expenses probably shouldn't be interpreted at all. They've already told us that we won't hear anything about legal matters until they become public record. It might arguably be criminal to project stable legal expenses when papers had already been filed starting an expensive new lawsuit, but short of that, they can always say that they don't predict in this area.

    I'm still wondering about the bonds posted during the "Presidential review period" in the Wireless matter. They were supposed to have been forfeited 10 weeks ago. Even if a legal dodge was used to make the amount zero, we ought to know about it by now.

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    • A couple more things. I guess the factory purchase is one of those annoying blanks that needs to be filled in. There's probably a lot of color to it that we aren't ever going to hear. It was EXTREMELY interesting that Mr Young, who is generally about as cautious as they come, said flatly that there will be a MEMS camera design win in the second quarter.

      REALLY listening to the griping about licensees not playing nice, it sounded VERY like new legal action is at least being contemplated.

      Curious that silent air cooling wasn't mentioned at all. I mean, it was never going to be a BIG business, but it was supposed to be a happy note for this quarter. In principle, the needed DC-to-DC converter technology overlaps that needed for MEMS.

      Overall, I'm inclined to buy the dip.

    • Jac - I have no skin in the game here and just follow TSRA out of habit nowadays. Having said that, my immediate reaction to a dividend payout on a company like TSRA is that it's an admission of not having very good ideas on how to put their cash horde to work... That seems surprising for such a low cap, still relatively immature technology company. Though investors seem to be demanding dividends more in the marketplace in general, you would think that instituting one in a company like TSRA is not a good sign regarding the vision current management has for its future.... I don't mean to be negative and am not trying to bring this down, but that's my reaction from afar....

      • 1 Reply to foreverwhiteroses
      • I'm a great deal more shrill over on the EZPW board, but a company needs to have some reason for its owners to be happy that they are owners. A dividend is one of the easiest ways to do it. That is especially true today, when money can be borrowed for virtually no interest (as long as you're solid enough to get it at all). And frankly, a dime per quarter is pretty token when you have better than $10 a share of cash.(I'm an interested spectator of AAPL; it mattered that even in a bad quarter they still had a superstar)

        Then there's the "Do they know something?" element. A middle-of-the-road guestimate has as much cash as the company now has on hand coming in from settlement of most of The Wireless Matter and the second Amkor arbitration over the next 18 months. The push to DO SOMETHING WITH THAT CASH NOW could get ugly.

        What's the "do something internally" alternative? Would you have "such a low cap, still relatively immature technology company" recreate Xerox PARC (or Bell Labs, or DuPont Central Research, or Amoco Research)? Be a hell of a tail to wag, and frankly, shareholders were happy to see those go.

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