January 25, 2013
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of IP licensor Rambus (NASDAQ: RMBS ) are up by about 7% today after topping out at nearly 11% in the morning. Investors are ignoring weakened revenue and are instead keying in on the company's bottom-line beat.
So what: Rambus posted revenue of $57.4 million and reported adjusted earnings per share of $0.07 for the quarter. Analysts were looking for $60.3 million on the top line, but expected a loss of $0.12 per share. The sizable EPS beat was more than enough to make up for gradually declining revenue, particularly as it reversed a gruesome trend of sagging EPS over the past several quarters. CFO Satish Ron sounded a hopeful note that the company would be positioned for improved profitability for 2013, but we expect such things in conference calls, so guidance is more important.
Now what: Speaking of guidance, Rambus projects first-quarter revenue in the range of $58 million to $63 million, with pro forma net income clocking in in a rather wide range of $4 million to $10 million. The top line is a bit higher than this quarter's number, but with non-GAAP net income from the current quarter clocking in at $8.3 million, the bottom-line projections don't offer much space for growth. Rambus has been stuck in a rut for a while, and despite today's beat on an adjusted basis, there doesn't seem to be a lot of forward momentum yet in store.
Want more news and updates? Add Rambus to your Watchlist now.
2013 and beyond
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.