KING OF PRUSSIA, Pa.-Investors reacted harshly to a decline in InterDigital Communications Corp.’s net income, sending the company’s stock down almost 15 percent after the news to about $21 per share.
InterDigital’s net income in the fourth quarter clocked in at $1.1 million, down from the $5.7 million it reported in the same quarter a year ago. The company’s revenues in the quarter totaled $24.7 million, down from the $27.1 million the company scored a year ago. The company blamed such decreases on its ongoing patent and legal battles with Nokia Corp., Samsung Electronics Co. Ltd. and Lucent Technologies Inc., but InterDigital also expressed optimism for the coming year due to the pending launch of a variety of third-generation networks.
“As we move into 2004, we’re encouraged by industry anticipation of double-digit growth in handset sales and renewed optimism for 3G rollout,” said Howard Goldberg, InterDigital’s president and chief executive officer. “With the industry starting to return to financial health, we expect to benefit from both continued investment in 3G infrastructure and the increasing numbers of 2G and 3G handsets sold. We are also encouraged by early indications of operators’ and manufacturers’ interest in technology extensions and enhancements such as those we are working on in the areas of High Speed Downlink Packet Access technology and Smart Antenna solutions for WLAN and cellular applications.”
Separately, InterDigital announced it amended its patent license agreement with Sharp Corp. Under the new deal, Sharp will make an upfront payment of $17.8 million in the second quarter as an advance against future royalty obligations. InterDigital said the payment is in addition to a $11.1 million paid by Sharp when it signed its InterDigital patent license agreement in 2001. InterDigital said that once the advance royalty payment is used up, Sharp will make additional royalty payments based on sales of its products.
