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Mobile-technology company Vringo (NASDAQ: VRNG ) announced its 2012 earnings last week, and as Charles Dickens would say: It was the best of times, it was the worst of times.
Vringo, which specializes in mobile entertainment applications and application patents, aggressively set out to make its name known last year and pulled off a number of impressive feats as a result. Sadly, its final numbers didn't do much to reflect this hard work. Here's a closer look at the state of Vringo, and whether it deserves your investing dollars.
As you'd expect from any corporate conference call, Vringo CEO Andrew Perlman was quick to announce the company's high points of the year. The company's Facetone product, which creates a photo slideshow on a phone screen whenever a friend calls, became available on both Apple's iPhone and Google's Android, snagging a huge new audience.
Vringo also joined forces with company Innovate/Protect, a company that aims to get the most bang out of a company's intellectual-property buck. The resulting subsidiary won a fierce patent lawsuit against tech heavyweights Google and AOL, to the tune of $30 million. As if that wasn't enough of an accomplishment, Vringo also snagged 500 copyright patents from Nokia. These all seemed like events worth celebrating, but in this case, there's a darker side to success.
This company made some great strides in terms of working with high-profile companies, but you'd never know it by taking a look at Vringo's financial statement. In 2012, Vringo's overall revenue tallied up to $369,000, a 48% drop from last year's total. The value of Vringo's EPS dropped, too, from $1.17 to $0.53, because of an increase in the amount of shares.
Vringo investors may not approve of the company's move to multiply its shares, since the fewer there are, the more they're worth. By increasing the amount, however, Vringo is extending an invite for even more shareholders to hop on board.
It's never a good time for a company's revenue to slice in half, but it's an even bigger problem when that company is still a relative newbie to the market. Vringo has been on the scene for barely two and a half years, and for the moment its financials are in a huge slump.
The gears are fiercely moving behind this struggling company, however, and by expanding its scope to include patents, the company could be more valuable than it appears. Even though its stock is ridiculously cheap, it might be best to wait and see how Vringo's latest strategies pan out before you think about buying.
Nokia, for its part, has been struggling in a world of Apple and Android smartphone dominance. However, the company has banked its future on its next generation of Windows smartphones. Motley Fool analyst Charly Travers has created a new premium report that digs into both the opportunities and risks facing Nokia to help investors decide if the company is a buy or sell. To get started, simply click here now.