Volume Tanker: Tessera (TSRA)

Posted in General 
December 2nd, 2008

Tessera Technologies Inc. (NASDAQ: TSRA) is still way down pre-market after it dropped a bomb in the after-hours session.  Shares had slid 9.5% yesterday to $16.62 at the close, and shares were down by 42% at $9.73 last night.  It is actually worse this morning with shares down at $9.33 with 30 minutes to the open.

The company said that the ITC issued an initial determination in its Wireless ITC action.  The Administrative Law Judge overseeing the International Trade Commission action brought by Tessera against certain wireless manufacturers (Qualcomm-QCOM was one) issued an Initial Determination finding Tessera’s asserted patents are valid but not infringed by the respondents.  Qualcomm (QCOM) earlier had confirmed that an Administrative Law Judge of the U.S. International Trade Commission made an initial determination that Qualcomm’s chip packages did not infringe against two patents owned by Tessera and found that the patents are valid.

The company tried to raise revenue guidance because it had not included any revenue based on the outcome of this action in its forecasts.  It also said that it remains financially strong.  Due to stronger than expected royalty revenue from certain existing customers and an option fee, Tessera raised Q4 revenue guidance to a new range between $67 to $69 million.  Its prior guidance was $60 to $62 million and Thomson Reuters has an estimates of $61.48 million First Call consensus.

If this level holds up, it will be a new 52-week low as the prior range was $11.11 to $44.97.

Jon C. Ogg
December 2, 2008

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