DOWJONESInterDigital 'Moving Quickly' On Decision For Modem Pdt Ops
InterDigital 'Moving Quickly' On Decision For Modem Pdt Ops
Last Update: 3/3/2009 11:07:40 AM
By Aja Carmichael
Of DOW JONES NEWSWIRES
New York (Dow Jones)--Shares of InterDigital Inc. (IDCC) fell 11% after the
company's fourth-quarter earnings missed Wall Street expectations and the company
reported weakness in its patent license royalties amid a soft Japanese market.
In a conference call Tuesday, Chief Financial Officer Scott A. McQuilkin said the
company's royalties from its Japanese licensees have declined due to "worldwide
economic weakness, inventory adjustments and a shift away from subsidization of
retail handset prices by operators."
McQuilkin added that for the near-term the company expects that its Japanese
licensees, which include Sony Ericsson, LG Electronics and NEC Corp., will
continue to face a challenging environment.
In recent trading, shares of the wireless technology company fell 11% to $25.50.
The stock, which has a market capitalization of $1.14 million as of Tuesday,
declined 12% and hit an intraday low of $25.25 earlier in the trading session.
For the quarter ended Dec. 31, InterDigital reported net income of $3.83 million,
or 9 cents a share, compared with a loss of $1.97 million, or 4 cents a share, a
year earlier.
Revenue rose 6.9% to $58.7 million, helped in part by a $4.1 million increase in
technology solutions revenue and a $3.8 million increase in past infringement.
These increases were partially offset by a $4 million decline in recurring patent
license royalties.
The company said recurring revenue from existing licensing agreements was $51.4
million.
Analysts polled by Thomson Reuters were expecting earnings of 16 cents a share
and $57 million in total revenue.
Looking forward, the company said in the first quarter it expects recurring
revenue from its existing pacts of $69 million to $71 million. The company also
said it is moving quickly to make a final decision on its modem products
operations.
InterDigital holds patents on technologies which it licenses to manufacturers of
second-generation wireless telephone technology - better known as 2G - 2.5G and
3G.
Earlier this year, Samsung Electronics Co. (005930.SE) said it would pay $400
million in royalties to InterDigital to license the company's 2G mobile
technology with no time limit and its 3G products through 2012. The two companies
had been in litigation for almost two years to settle the long-running patent
disputes.
-By Aja Carmichael, Dow Jones Newswires; 201-938-5218;
aja.carmichael@dowjones.com;
(END) Dow Jones Newswires
March 03, 2009 11:07 ET (16:07 GMT)
