Ge_Jim my earnings estimate for 2003 are higher than that if you include Nokia and Samsung's 2002 accrual, which will have to be rcorded into 2003's Net Income. Repost of a previous post as follows:
Posted by: rmarchma
In reply to: rmarchma who wrote msg# 17830 Date:4/4/2003 4:15:41 PM
Post #of 29769
Revised 2003 revenue and earnings projections
I probably overdid the total expenses by about $10m due to a miscalculation. The expenses for 2002 had been running about $20m per quarter = $80m per year. However, they need to be increased some to cover the 10% insurance company reimbursement on the Ericy/Sony receipts, which should be about $6m for 2003, and perhaps $4m more for general increases. Revised calculations, which begin with the total expenses being changed to $90m from $100m, as follows:
Ericy 2G settlement $34m
Ericy/Sony 2G recurring $10m (for 2003)
Ericy 2G infrastructure $5m (for 10 months)
Nokia 2002 accrual $100m (recorded into '03)
Samsung 2002 accrual $ 22m (recorded into '03)
Nokia 2003 discounted recurring $80m
Samsung 2003 discounted recurring $20m
NEC 2G settlement $13m
NEC 3G infra/handsets $15m
Sharp GSM/GPRS/3G $5m
Sharp PDC/PHS $20m (assuming renewal at comparable rates)
Nokia engineering $1m
Other existing licensees $10m
Interest Income $5m (2.5% on $400m cash balance x 1/2 year)
Total projected revenues $340m
Total projected expenses $90m
Projected earnings pre-tax $250m
Projected income taxes $43m
Estimated Net Income $207m
Estimated Earnings per Share = $3.76 (based on estimated 55m Basic weighted average shares outstanding)
Projected federal and state income tax at 38% (after all $137m of NOL carryforwards are fully utilized) = $250m -137m NOL carryforward = $113m taxable at 38% = $43m total. Foreign withholding at $340 foreign revenue x 10% foreign withholding = $34m payable to foreign tax authorities, with the remaining $9m payable to US tax authorities).
Of course, the market might discount the Nokia and Samsung 2002 royalties that will have to be recorded into 2003, when trying to establish appropriate PE multiples for 2003 earnings.
(Added note: the above post was before the 10K and first quarter CC. Therefore Ericy/Sony 2003 recurring needs to be increased by about $3m, the two-year prepaid advance was $26m divided by 2 years = $13m per year. Also add another $1m for Ericy infrastructure for 2003, as an entire year is being earned. I believe that Nokia and Samsung will also come in higher than the very conservative projections of IDCC, which I am using above, just as Sony/Ericy 2003 handset royalty actually came in higher than initial projections).
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