Thursday after the bell, Tessera Technologies Inc. (TSRA), a provider of miniaturization solutions for electronic products, reported a profit for the third quarter versus a loss last year, due primarily to significantly lower litigation expense. Guiding fourth quarter, the company anticipates weaker revenues that fell short of analysts' view, sending shares down 9% in after-hours trading.
San Jose, California-based Tessera reported third-quarter net income of $12.13 million or $0.24 per share, compared to net loss of $5.36 million or $0.11 per share in the year-ago period. The results of the recently ended quarter included non-cash charges of $6.9 million in stock-based compensation and $3.0 million in amortization charges.
Excluding items, non-GAAP net income increased to $19.16 million from $2.34 million last year. Non-GAAP earnings per share increased to $0.37 from $0.05 a year ago.
On average, seven analysts polled by Thomson Reuters expected the company to report profit of $0.21 per share for the quarter. Analysts' estimates typically exclude special items. Third quarter total revenues increased to $66.12 million from $63.50 million last year, ahead of market consensus of $65.70 million for the period, citing "better than anticipated results from Micro-electronics customers". The company's major division's contribution was higher at $59.06 million than $56.59 million a year-ago. Imaging and optics segment also contributed $7.06 million to the top-line, higher than $6.91 million last year.
Total operating expenses declined to $46.24 million from $67.05 million, led by a $23.15 million decline in litigation charges. The company had an operating income of $19.88 million compared to a loss of $3.55 million last year.
For the year-to-date period, net income was $63.44 million or $1.30 per share versus a loss of $3.04 million or $0.06 per share in the same period last year. The company earned $85.47 million or $1.71 per share, higher than $20.18 million or $0.41 per share, excluding items. Revenues for the nine-month period improved to $242.97 million from $179.16 million.
In its financial outlook, the company said it expects fourth-quarter total revenues to range between $60.0 million and $62.0 million, falling short of Wall Street estimates, which anticipate $69.97 million for the period.
"Tessera has two major DRAM customers with volume-based pricing incentives that will reduce the company's revenue sequentially in the fourth quarter 2009," said the company in response to the projected weaker revenue between $53.0 million and $54.0 million from core Micro-electronics segment.
Imaging & Optics revenue, in total, is expected to be between $7.0 million and $8.0 million, lower from last year due to the slowdown in the semiconductor equipment market.
TSRA finished Thursday's regular trading sessions up 6.25% or $1.58, at $26.86 on 1.25 million shares. In after-hours trading, shares lost 9.53% or $2.56, at $24.30.
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