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: InterDigital, Inc. (Nasdaq: IDCC) dropped 14% in intraday trading today after it reported fourth-quarter EPS of $0.76, which fell short of the consensus estimate of $0.79.

So what: IIDCC has been riding high on the rapid growth of mobile devices and networks, with revenue growth of 25% and EPS growth of 43% in its most recent quarter. But first-quarter guidance calls for revenue from existing agreements of $76 million to $77 million, 20% below the prior quarter's revenue and 34% below an extraordinarily strong year-ago quarter. No EPS guidance was offered.

Now what: The outlook portion of the earnings release discussed efforts to renew and expand a licensing agreement with LG and negotiate royalty payments, all of which are significant revenue drivers for IDCC. These negotiations could go either way and there is plenty of room for both upside and downside surprises. Investors need to ask themselves if the risk/reward justifies the forward P/E ratio of 18.6, a discount to the 25.2 ratio for the semiconductor sector.

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