eastunder Tuesday, 04/21/15 12:56:00 PM Re: eastunder post# 16987 0 Post # of 17010 Rambus (RMBS) Beats on Q1 Earnings, Revenues In Line - Analyst Blog http://finance.yahoo.com/news/rambus-rmbs-beats-q1-earnings-132001242.html Zacks By Zacks Equity Research 3 hours ago Rambus Inc. RMBS reported first quarter of 2015 adjusted earnings per share (including stock-based compensation but excluding all one-time items) of 12 cents, which beat the Zacks Consensus Estimate of 7 cents. However, adjusted earnings were down from 16 cents reported in the year-ago quarter. Quarter Details Revenues came in at $72.9 million, which not only decreased 6.9% on a year over year basis but also roughly came in line with the Zacks Consensus Estimate of $73 million. Reported revenues were toward the lower end of management’s guided range of $70 million to $75 million. The year-over-year drop was primarily due to lower-than-expected royalty revenues, partially offset by new licensing agreements with International Business Machines Corporation IBM. The company reported revenues from Memory and Interfaces Division (MID), Cryptography Research (CRI) and Lighting and display technology (LDT) divisions of $54.7 million (down 10.6% year over year), $12.8 million (down 0.8% year over year) and $5.4 million (up 28.6 % year over year), respectively. Adjusted operating expenses (including stock-based compensation but excluding all one-time items) in the first quarter were $48.7 million, up 4% from the year-ago quarter, primarily due to higher cost of sales. Operating expenses, as a percentage of revenues, also increased from 59.8% to 66.8% on a year over year basis. This in turn impacted operating results. Adjusted operating income came in at $24.2 million compared with $31.5 million in the year-ago quarter. Operating margin was 33.2% compared with 40.2% reported in the year-ago quarter. Rambus’ adjusted net income during the quarter came in at 16.3 million. Adjusted net income excludes amortization, restructuring charges, acquisition costs and other one-time items but includes stock-based compensation expenses calculated on a proportionate tax basis. On a GAAP basis, net income was $14.9 million, which improved from $13.6 million reported in the year-ago quarter. Rambus exited the quarter with cash, cash equivalents and marketable securities of approximately $317.8 million, up from $300 million in the prior quarter. During the quarter, the company generated cash from operations of $15 million. Guidance The company expects second-quarter revenues to range between $70 million and $74 million (mid-point $72 million), lower than the Zacks Consensus Estimate of $73 million at its mid-point. Moreover, the company expects pro-forma operating expenses to be between $46 million and $49 million. Pro-forma net income is expected in the range of $13 million to $17 million. The company reiterated its 2015 outlook. For 2015, the company expects revenues to be between $300 million and $315 million. The Zacks Consensus Estimate is pegged at $304 million. Moreover, the company expects pro-forma operating expenses between $185 million and $190 million while pro-forma net income is expected in the range of $67 million to $79 million. Our Take Rambus reported modest first-quarter results with the bottom line surpassing the Zacks Consensus Estimate but the top line matching the same. However, year-over-year revenue comparisons were unfavorable primarily due to lower royalty revenues. Further, the company provided a tepid second quarter revenue guidance due to lower deal signings. Nonetheless, with the rising popularity of energy-efficient lighting, LED products in the latest architectural, retail, commercial and residential lighting fixtures, we find Rambus in a favorable position to capitalize on this opportunity. Rambus is going through a restructuring phase and we expect it to yield favorable results in the coming quarters. Additionally, licensing agreements — the result of successful monetization of Rambus’ patents — remain a recurring revenue source. The company’s investments in the CryptoManager platform and certain memory and interface technologies can impact margins in the near term. Other companies in the same space include Semiconductor Manufacturing International Corp. SMI and Advanced Micro Devices AMD. Currently, Rambus holds a Zacks Rank #2 (Buy). "Then there was a woman, a lion of a woman."