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Rambus 2Q beats Street
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April 12, 2000: 7:00 p.m. ET
Chip maker's earnings per share rise 88 percent, paced by revenue growth
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NEW YORK (CNNfn) - Rambus Inc. on Wednesday reported fiscal second quarter earnings that beat Wall Street's expectations, as its revenue for the quarter rose 59 percent.
Before special items, Rambus (RMBS: Research, Estimates), which makes money by licensing a technology that is used to speed up computer memory systems, reported operating income for the second quarter of $4.9 million, compared to $1.6 million in the same period last year. Also excluding one-time items, earnings per share rose 88 percent to 15 cents from 8 cents in the same period last year.
 Analysts polled by earnings tracker First Call had expected the company to earn 14 cents per share during the quarter. While the company's results were slightly ahead of analyst expectations, the company's stock was down 22-5/16 at 191-1/2 in after-hours trading, after falling 32-3/16 to 213-13/16 in regular trading Wednesday. Rambus shares have been extremely volatile in recent months.
Rambus recorded a one-time charge of $171 million associated with the vesting of employee stock options. All but $1.2 million of this charge was a non-cash item.
If Rambus-based chipsets make up more than than 20 percent of Intel's chipset shipments for two consecutive quarters, then Rambus could have to take an additional charge of $400 million or more to cover more employee stock options, the company said in its earnings release. That charge, if it is incurred, will be non-cash, except for small payment for payroll taxes, Rambus said.
Rambus technology is designed to address the performance speed gap between today's computer microprocessors and dynamic RAM (DRAM), which stores instructions and data needed by the microprocessors. In recent years, microprocessors and controllers have become substantially faster and more powerful than DRAM. Rambus licenses its technology to several major chip makers, including Intel, and collects royalties based on chips sold incorporating Rambus' technology.
In a conference call Wednesday, Rambus' chief financial officer, Gary Harmon, said that 8 million-to-9 million Rambus DRAM chips were shipped in the quarter ending March 31. That's up sharply from one million-to-two million shipped in the quarter ending Dec. 31, but below the 10 million that Rambus had previously forecast. The company expects 100 million Rambus DRAM chips to ship this fiscal year.
 On March 22, Rambus shares soared after Morgan Stanley boosted its price target to $500 from $266. Morgan Stanley analyst Mark Edelstone attributed his upgrade to support for the company's technology from Intel and the use of Rambus technology in the hugely successful launch of Sony's PlayStation 2 in Japan. 
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Rambus Inc.
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