Rambus shares fall sharply on disappointing outlook
Shares of chip maker Rambus fall sharply on disappointing outlook
NEW YORK (AP) -- Shares of Rambus lost more than quarter of their value Tuesday after the memory chip designer said technical issues with one of its chips and the loss of potential deals will weigh on its revenue in the fourth-quarter and next year.
CEO Ronald Black said that a large licensing and partnership agreement that Rambus was negotiating in its security business had "stalled." Some smaller deals didn't materialize because of economic conditions in the chip industry, he said in a conference call following the release of the company's third-quarter results late Monday.
The company may also lose a potential customer because of a recently discovered technical issue with a memory chip, he said.
For the fourth quarter, Rambus expects revenue in the range of $71 million to $77 million. Analysts had expected revenue of $83.4 million, according to FactSet.
That means it expects revenue between $291 million and $297 million for the full year. That's below the $305.5 million analysts expected.
For 2016, Rambus expects revenue to be flat from 2015.
To save costs, the Sunnyvale, California, company said it would cut about 8 percent of its 527 employees. Rambus said it will complete the job cuts by the first quarter of next year.
Shares of Rambus Inc. fell $3.74, or 27 percent, to $10.14 in afternoon trading Tuesday.