KING OF PRUSSIA, Pa.-Wireless technology developer InterDigital Communications Corp. announced that it expects to post between $62 and $63 million in fourth-quarter revenue, much lower than Wall Street’s forecast of more than $100 million in sales. The company blamed its lackluster earnings mostly on delays in handset purchases in Japan.
InterDigital’s chief financial officer, Richard Fagan, explained that the company had expected Japanese users to purchase more 3G phones. InterDigital licenses technology to handset makers, and its revenues are tied to those vendors’ sales. Japanese customers held off on purchases as they awaited launches of both mobile number portability and several new handset model introductions.
“Many analysts expect that the launch of number portability and new handset introductions in fourth-quarter 2006 will stimulate market growth in Japan,” added Fagan. “As such, we anticipate that first-quarter 2007 recurring royalty revenues related to our licensees’ sales in Japan should be higher than fourth quarter 2006.”
InterDigital broke down its revenue numbers as:
–$48 to $48.5 million of recurring patent-license royalties from existing licensees;
–$12.5 million associated with the second-quarter resolution of patent-licensing matters with Nokia Corp.;
–$1.5 to $2 million related to technology solution agreements.
News of the company results pushed its stock down $2.24 to $30.55 per share.
InterDigital blames revenue troubles on sluggish Japanese sales
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