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Rambus falls short
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January 11, 2001: 5:42 p.m. ET
Rambus first-quarter earnings fall short of estimates, warns on royalties
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NEW YORK (CNNfn) - Computer memory technology specialist Rambus Inc. reported a first-quarter profit Thursday that fell short of the Street's expectations, partly because of a higher tax rate. In addition, it warned about future royalty revenue from a type of memory chip.
Rambus (RMBS: Research, Estimates), which makes money by licensing a technology used to speed up computer memory systems, said it earned $13.2 million, or 12 cents per share, during the quarter that ended Dec. 31, versus $2.56 million, or 3 cents, in the same period last year. If the tax rate had been the same as in the comparable quarter, the company's earnings would have been even with the mean analyst estimate of 13 cents a share, according to First Call/Thomson Financial.
At $34.7 million, Rambus' revenue for the quarter nearly tripled from the $11.9 million it took in during the same period a year earlier, but was slightly lower than the $35 million analysts had estimated.
Rambus shares rose $2.69, or 6 percent, to $48.88 in Nasdaq trade ahead of the earnings release after the market closed. It lost $5.16 to $43.72 in after-hours trading.
"Our first fiscal-quarter results continue to show the strength of the Rambus business model," said Rambus CEO Geoff Tate in a statement. "We are pleased with the market reception for both the Sony PlayStation2 and the Intel Pentium 4, and we are confident that these products will drive the demand for RDRAM-compatible integrated circuits to higher levels in fiscal 2001."
However, Rambus cautioned investors about a possible slowing of revenue from a type of memory called SDRAM.
"We also recognize that an increasing percentage of our revenue is due to royalties on SDRAM-compatible integrated circuits," the company said. "With the price decrease for SDRAMs in the December quarter, it is unlikely that royalties for these products in our March quarter will exceed the levels included in this report unless we sign additional licensees."
"In addition, we have moved to larger facilities for long-term growth and will be incurring increased costs in the near term due to the new facilities as well as our continuing vigorous legal defense of our intellectual property," Rambus said. 
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