InterDigital Beats Expectations but Takes a Step Back Anyway

InterDigital (Nasdaq: IDCC  ) reported earnings Feb. 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), InterDigital beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share dropped significantly.

Margins contracted across the board.

Revenue details
InterDigital logged revenue of $77.0 million. The four analysts polled by S&P Capital IQ expected to see a top line of $74.2 million on the same basis. GAAP reported sales were 19% lower than the prior-year quarter's $95.3 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.49. The four earnings estimates compiled by S&P Capital IQ anticipated $0.46 per share. GAAP EPS of $0.49 for Q4 were 37% lower than the prior-year quarter's $0.78 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 72.5%, 1,320 basis points worse than the prior-year quarter. Operating margin was 46.1%, 1,020 basis points worse than the prior-year quarter. Net margin was 29.6%, 640 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $69.6 million. On the bottom line, the average EPS estimate is $0.35.

Next year's average estimate for revenue is $306.3 million. The average EPS estimate is $1.78.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,256 members out of 1,301 rating the stock outperform, and 45 members rating it underperform. Among 367 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 357 give InterDigital a green thumbs-up, and 10 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on InterDigital is outperform, with an average price target of $64.40.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. IDCC


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