Profit Slips at Rambus

Litigation costs offset growing revenue.

Author:: TSC Staff
Publish date:: Jul 14, 2005 4:30 PM EDT

Second-quarter profit fell atRambus (RMBS) - Get Report as higher litigation costs offset a 14% rise in revenue.

In after-hours trading, the company's shares recently fell 2.4% to $14.29.

The company said after the bell Thursday that it earned $5.4 million, or 5 cents a share, compared with $8.3 million, or 8 cents a share a year earlier.

Revenue grew to $40 million from $35 million a year earlier. Much of this amount is due to royalty revenue, which rose 17% to $34.6 million. The increase primarily reflects an increase in royalties of SDRAM and DDR, two types of electronic memory.

However, costs and expenses rose to $34.4 million from $24.4 million a year earlier. About half the increase was due to litigation expense.

Shares of Rambus have been affected for months by a

slew of patent disputes and subsequent litigation.

"The second half of the year is a challenge to forecast, given the number of patent license agreements and renewals we are currently negotiating. We remain committed to signing agreements that generate long-term value," said CEO Harold Hughes. "We have taken important and necessary actions to protect our intellectual property while we work on patent license renewals."