InterDigital Inc (IDCC)

[la-tsla-fan]

Let's break down the earnings announcement:

1. Revenue under ASC 606:

From the earnings announcement,

First quarter 2018 recurring revenue was $64.1 million.
First quarter 2018 total revenue was $87.4 million.

Guidance provided back in Febuary:
Under ASC 606, the company expects first quarter 2018 revenue to be between $66 million and $71 million, comprised primarily of recurring revenue.

In order to compare estimated vs actual, we need to make an assumption about "primarily". Let us assume that in this instance "primarily" means 90%. Then the guidance was:

Recurring revenue - Between 59.4 and 63.4 million.
Other Revenue - Between 2.6 and 11.6 million

So we handily beat guidance on recurring revenue and other revenue.

2. Expenses:

First quarter 2018 operating expenses decreased by $3.3 million to $57.3 million

3. Earnings:

First quarter 2018 net income was $29.9 million, or $0.84 per diluted share.

Expected earnings per share:

From https://www.earningswhispers.com/stocks/idcc: $.28
Yahoo: $.24

Beat by 200%

4. Effective Tax Rate:

The company expects to report a negative effective tax rate for the full year, but expects its long-term tax rate will be in the range of approximately 14% to 15%.

In my opinion, this information is extremely important and it is GOOD NEWS.

Apparently the Street had EVEN HIGHER expectations. Or more likely, they are bamboozled by the comparison to Q1 2017. By the way, even that comparison shows a GAIN of 11% on an ASC 605 basis.

IF I HAD ANY DRY POWDER, I WOULD BE A BUYER ON THE SILLY DROP IN PRICE.

jmo
LA