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Tessera Technologies Inc. Message Board

  • investora2z investora2z Oct 27, 2013 6:33 AM Flag

    Earnings will be the next trigger

    The Q3 numbers are going to be released in the first week of November. That will determine the short term trend of the stock. Analyst estimates the revenues to come in at $36 million, while the management guidance is for revenues in the range of $35-38 million. This indicates a decline on a yoy basis. In Q2'13, the revenues declined on a yoy and a sequential basis. The sale of some Micro-optics assets to FLIR will give the company additional $15 million. The long term performance of the company has not been good as the revenues have declined, and the losses have increased over the past few years. The revenues & operating profit of the IP segment have declined. The digital optics segment has also seen decline in revenues, and the net losses have increased. The overall market for monetizing IPRs has done well recently, and several companies have begun to assert their proprietary or acquired patent rights. Spherix (SPEX) recently acquired hundreds of patents and has already filed lawsuits against T-Mobile, Vtech and Uniden to enforce its rights. For Tessera, the operating expenses comprise mainly of R&D and SGA expenses, and there have been unusual expenses related to impairment of Goodwill and restructuring expenses. The litigation costs have also increased. On the positive side, the cash position is very good, and there is no debt. The spin-off of the manufacturing part of the digital optics segment may help reduce pressure on margins because that has been the major drag for years. The stock performance over the last 3-4 months has not been good, though it has appreciated 33% on a 52 week basis. It is trading around important levels, and needs to rebound and cross $20 convincingly so that it can gain positive momentum. The sustainability of any upward movement will depend on the financial performance in the next few quarters.

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