Chip interface technologies and architectures provider Rambus Inc. (RMBS), on Tuesday raised its revenue outlook for the third quarter, citing an increase in its variable royalty payments, attributed to higher semiconductor shipments. Rambus further said the rescheduling of the price-fixing trial, coupled with lower engineering spending, drove a downward revision in its anticipated operational expenses.
The Los Altos, California-based chip designer now expects revenue for the third quarter to be between $27 million and $28 million, up from its earlier forecast of $22 million and $25 million.
For the preceding second quarter, Rambus reported a loss that narrowed, even as revenue dropped 24.4% reflecting expiration of patent license agreements.
The company incurred a net loss that narrowed to $24.00 million or $0.23 per share from $138.32 million or $1.32 per share in the same quarter a year ago. Revenue for the second quarter dropped 24.4% to $26.98 million from $35.72 million in the prior-year quarter. Revenues declined primarily due to lower royalties resulting from the expiration of the Elpida patent license agreement at the end of the first quarter of 2008 for which revenues were recognized through the second quarter of 2008.
On a segmental basis, royalty revenue declined to $24.76 million from $35.72 million , while contract revenue declined to $2.23 million from $3.43 million in the same quarter last year.
The company currently anticipates adjusted operating expenses for the quarter, excluding stock-based compensation expenses and any stock-based compensation restatement expenses or benefits to be between $41 million and $44 million, owing to a delay in litigation-related spending and lower engineering expenses.
Previously, the company projected adjusted operating expenses, excluding stock-based compensation expenses and any stock-based compensation restatement expenses or benefits of $44 million to $49 million.
For the second quarter, the company's total costs and expenses were $49.29 million, down from $52.63 million in the same quarter last year. Expenses included $7.9 million of stock-based compensation expenses and a net recovery of $0.4 million for previous stock-based compensation restatement and related legal expenses.
Harold Hughes, President and Chief Executive Officer, Rambus said, "Semiconductor shipments rose to meet current OEM demand, after an overcorrection earlier this year, driving an increase in our variable royalty payments and consequently higher expected revenue for the quarter."
RMBS closed Tuesday's regular trading at $18.03, up $0.28 or 1.58%, on a volume of 1.95 million shares on the Nasdaq. In after hours, the stock further gained $0.60 or 3.33%, trading at $18.63.
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