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 chip interface technologist Rambus
So what: Rambus' first-quarter loss widened so sharply -- net loss of $27.9 million versus $4.2 million in the year-ago period -- that analysts have no choice but to lower their valuation estimates. Flat revenues, coupled with higher costs, continue to weigh heavily on Rambus' bottom line, reinforcing investor fears over its long-term profitability.
Now what: For the second quarter, Rambus sees customer licensing income of $54 million-$60 million on revenue of $53 million-$59 million, which also reflects weak sequential growth. "We are well positioned to build and develop the series of solutions and innovations that will enrich the experience of end-users around the world," CFO Satish Rishi reassured investors. "We will continue developing into a company that can take advantage of technology disruptions in large markets." However, given the strong margin headwinds working against Rambus and its quickly-fading litigation prospects, I wouldn't exactly bet on it.
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