Couple of firms commenting on InterDigital (NASDAQ:IDCC) after the co issued negative guidance for Q4:
- Piper Jaffray notes that InterDigital cited weaker-than-expected revenue from Japanese licensees, primarily due to delays in 3G handset purchases as Japan transitions to local number portability. InterDigital indicated recurring royalties from sales related to Japan are expected to improve during Q107, although the firm is cautious such improvement may take time given our belief several Japanese OEMs and carriers had built extra handset inventory heading into the transition period for local number portability.
Given the declining likelihood any settlement payment from Samsung will occur during 2006, they are adjusting their estimate regarding the timing of final settlement from Samsung. Firm is now modeling a settlement payment from Samsung during Q307, although the timing and magnitude of any final settlement payment remains uncertain. Due to the revised timing of the Samsung settlement payment, offset by indications of slower-than-expected royalty growth, they are raising 2007 estimates from $0.49/$183M to $2.62/$362M, but are lowering recurring 2007 estimates from $0.49/$183M to $0.43/$182M.
Maintains Underperform and $26 tgt.
- First Albany is more bullish noting the shortfall versus tgeur estimate was in recurring patent licensing royalty revenues. According to the company, fourth-quarter revenues were negatively
impacted by delays in 3G handset purchases during the third quarter of 2006 in Japan. The company anticipates 1Q:07 recurring royalty revenues from licensees in Japan should be higher than those for 4Q:06. For 4Q:06, they have lowered their revenue estimate to $63.0 million from $67.4 million.
First Albany notes IDCC shares sold off more than they would have thought on the guidance, in part because of the consensus estimate being skewed by one estimate that includes the revenues from the settlement of the company's litigation with Samsung. The consensus revenue estimate was $105 million due to one estimate at $248 million. Firm reiterates Strong Buy rating and $40 tgt.
Notablecalls: I would be an opportunistic buyer around the $29 level as the news can be characterized more of a pushout than anything else. Co's like this one currently represent the better way of playing the handset space. Would use half of a normal position size as one should be ready to cut their losses quickly.
- Piper Jaffray notes that InterDigital cited weaker-than-expected revenue from Japanese licensees, primarily due to delays in 3G handset purchases as Japan transitions to local number portability. InterDigital indicated recurring royalties from sales related to Japan are expected to improve during Q107, although the firm is cautious such improvement may take time given our belief several Japanese OEMs and carriers had built extra handset inventory heading into the transition period for local number portability.
Given the declining likelihood any settlement payment from Samsung will occur during 2006, they are adjusting their estimate regarding the timing of final settlement from Samsung. Firm is now modeling a settlement payment from Samsung during Q307, although the timing and magnitude of any final settlement payment remains uncertain. Due to the revised timing of the Samsung settlement payment, offset by indications of slower-than-expected royalty growth, they are raising 2007 estimates from $0.49/$183M to $2.62/$362M, but are lowering recurring 2007 estimates from $0.49/$183M to $0.43/$182M.
Maintains Underperform and $26 tgt.
- First Albany is more bullish noting the shortfall versus tgeur estimate was in recurring patent licensing royalty revenues. According to the company, fourth-quarter revenues were negatively
impacted by delays in 3G handset purchases during the third quarter of 2006 in Japan. The company anticipates 1Q:07 recurring royalty revenues from licensees in Japan should be higher than those for 4Q:06. For 4Q:06, they have lowered their revenue estimate to $63.0 million from $67.4 million.
First Albany notes IDCC shares sold off more than they would have thought on the guidance, in part because of the consensus estimate being skewed by one estimate that includes the revenues from the settlement of the company's litigation with Samsung. The consensus revenue estimate was $105 million due to one estimate at $248 million. Firm reiterates Strong Buy rating and $40 tgt.
Notablecalls: I would be an opportunistic buyer around the $29 level as the news can be characterized more of a pushout than anything else. Co's like this one currently represent the better way of playing the handset space. Would use half of a normal position size as one should be ready to cut their losses quickly.
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