InterDigital, Inc. (IDCC), a developer of digital wireless technologies, Tuesday reported a surge in profit for the second quarter, mainly driven by revenue contributions from a new patent license deal with Samsung together with lower operating expenses.
For the most recent quarter, the company's net income increased more than four times to $26.45 million or $0.59 per share from $5.85 million or $0.13 per share in the comparable quarter a year earlier.
On average, three analysts polled by Thomson Reuters expected the company to report earnings of $0.53 per share for the quarter. Analysts' estimates typically exclude special items.
The company attributed the surge in net income to revenue contributions from a new patent license agreement with Samsung signed in January 2009 as well as reduced operating expenses resulting from its repositioning plan announced in first quarter 2009.
Quarterly revenues rose 28% to $74.93 million from $58.71 million in the prior year. Analysts anticipated revenues of $74.22 million for the quarter.
Segment-wise, patent licensing royalties grew 29% to $72.7 million from $56.2 million in the preceding year, benefited from the addition of $25.7 million in fixed-fee amortized royalty revenue from a patent license agreement with Samsung signed in first quarter 2009, $2.3 million in royalties for past sales, partly offset by a $10.4 million decrease in per-unit royalty revenue related to industry-wide declines in handset sales for comparable first quarter sales.
Meanwhile, technology solutions revenue dropped 12% to $2.2 million from $2.5 million in the year-ago quarter, mainly hurt by engineering service fees earned in second quarter 2008 that did not recur in second quarter 2009, offset by an increase in royalties earned on InterDigital's SlimChip modem IP.
Operating expenses for the latest quarter were $34.7 million, a decrease of 32%, compared to $50.87 million last year. Income from operations surged to $40.23 million from $7.84 million in the former year.
For the first six months, InterDigital's net income moved up to $17.76 million or $0.39 per share from $13.17 million or $0.28 per share in the same period a year earlier. Excluding repositioning charge of $37 million, half-yearly net income rose more than three times to $41.8 million or $0.93 per share from 13.2 million or $0.28 per share in the previous year.
First-half revenues climbed to $145.49 million from $114.73 million in the year-ago period.
Further, the company said it repurchased $14.7 million or 0.6 million shares of common stock through June 30, 2009.
Shares of IDCC closed Tuesday's regular session at $27.82, down $0.14, on a volume of 626K shares. In the after hours, the company's shares dropped 0.75% to $27.61.
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