InterDigital, Inc. IDCC reported healthy first-quarter 2021 results, wherein both the bottom and the top lines beat the respective Zacks Consensus Estimate.
This Wilmington, DE-based wireless R&D company’s share price moved up 1.4% on May 6, closing the trading session at $69.32.
Net income in the March quarter was $5.6 million or 18 cents per share compared with $116K in the prior-year quarter. The improvement was largely driven by higher operating income and lower interest. Also, the bottom line beat the Zacks Consensus Estimate by 19 cents, delivering a surprise of 1,900%.
InterDigital, Inc. Price, Consensus and EPS Surprise
InterDigital, Inc. price-consensus-eps-surprise-chart | InterDigital, Inc. Quote
Quarterly total revenues grew to $82.4 million from $76.2 million in the prior-year quarter. The growth shows that InterDigital is benefiting from a more diverse licensing program, along with the strength of its operating model. Also, the top line surpassed the consensus estimate of $80 million.
While total revenues from patent royalties equaled $80.2 million, the same from current technology solutions was $2.2 million. Recurring revenues were $78.6 million compared with $75.5 million a year ago.
The company is focused on pursuing agreements with unlicensed customers in the handset and consumer electronics markets.
Total operating expenses declined to $70.4 million from $71.5 million in the prior-year quarter. This resulted from lower patent administration and licensing expenses, and SG&A expenses. Operating income improved to $12 million from $4.7 million, driven by higher revenues and lower operating expenses.
Cash Flow & Liquidity
During the first quarter, InterDigital utilized $9.8 million of cash from operating activities compared with cash utilization of $26.9 million in the year-ago quarter.
Free cash flow was a negative $19.8 million compared with a negative $34.7 million a year ago. The change was primarily driven by the timing of collections under fixed-fee agreements.
As of Mar 31, 2021, the company had $884.7 million in cash, cash equivalents and short-term investments with $463.9 million of long-term debt and other liabilities. This compares with the respective tallies of $926.6 million and $415.9 million at the end of the previous quarter.
Zacks Rank & Stocks to Consider
InterDigital currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader industry are Vicor Corporation VICR, Cogent Communications Holdings, Inc. CCOI and Western Digital Corporation WDC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Vicor delivered a trailing four-quarter earnings surprise of 80.6%, on average.
Cogent delivered a trailing four-quarter earnings surprise of 29%, on average.
Western Digital delivered a trailing four-quarter earnings surprise of 26.3%, on average.
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