Why Rambus Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Rambus (NAS: RMBS) have plunged today by as much as 18% after the company reported unimpressive earnings last night.

So what: Revenue in the second quarter came in at $56.2 million, with non-GAAP customer licensing income of $57.4 million. The figures resulted in a net loss of $0.29 per share, worse than the $0.20 per share loss that analysts and investors were expecting.

Now what: During the quarter, Rambus also inked a license agreement with Cooper Lighting to use its patented lighting innovations. Sales fell 11% sequentially, and the company attributed this decline to lower royalties reported by other licensees in the industry. The drop was somewhat offset by a royalty payment from Broadcom. Compared to a year ago, revenue was down 15% due to decreases in contract revenue and the expiration of a patent license agreement.

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The article Why Rambus Plunged originally appeared on Fool.com.

Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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