Rambus Rises as Deal With Intel Boosts Earnings Estimates
Updated from 8:14 a.m. EDT
Rambus
(RMBS) - Get Rambus Inc. Report
was up 19.9% in early trading a day after the chip designer announced a mutual licensing agreement with chip manufacturing leader
Intel
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that boosts Rambus' earnings projections for the current quarter.
In a conference call following the announcement, Rambus said it now expects a fiscal fourth-quarter profit of 6 cents a share, on revenue of $27 million to $29 million.
Analysts were expecting a profit of 1 cent a share, according to Thomson Financial/First Call.
Replacing an earlier agreement, the five-year deal gives Intel complete patent coverage for Rambus designs, while Rambus gets the license coverage it needs for its own high-speed interface business.
Intel will make fixed, quarterly royalty payments of about $10 million over the term of the agreement, Rambus said.
Intel was down 2.7%.
