Please ensure Javascript is enabled for purposes of website accessibility

Why Rambus Shares Got Wrecked

By Alex Planes - Apr 19, 2013 at 12:57PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Is this meaningful? Or just another movement?

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 Rambus (RMBS 2.04%) are trading over 10% lower today after an ugly double miss on the company's first-quarter earnings report.

So what: Rambus showed a 6% gain on the top line with $66.9 million for the first quarter, but this came in below the $67.8 million analysts sought. A $0.09 loss per share was $0.05 worse than the consensus estimate. It didn't help that Rambus executives offered soft guidance for the in-progress second quarter, below both the first quarter's top line and adjusted net income.

Now what: Rambus now expects $53 million to $58 million in revenue for the second quarter, "which does not include several deals that we are currently negotiating," according to CEO Ron Black. Pro forma net income, an adjusted metric that came in at $13.4 million for the first quarter, is projected to be between zero and $6 million in the second quarter. No matter which way you slice it, this is looking to be a weak quarter in terms of official numbers. You might want to speculate on those incomplete deals getting signed, but that's not something that should be in any long-term calculation.

Want more news and updates? Add Rambus to your watchlist now.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Rambus Inc. Stock Quote
Rambus Inc.
RMBS
$24.57 (2.04%) $0.49

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
327%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.