Chipmaker Rambus beat analyst estimates for adjusted sales but missed views on adjusted earnings in the second quarter. Also, its revenue guidance was below estimates. RMBS stock fell hard on the news Tuesday.
The San Jose, Calif.-based company earned an adjusted 38 cents a share on adjusted sales of $139.4 million in the June quarter, according to FactSet. Analysts had been looking for earnings of 39 cents a share on sales of $138 million. In the year-earlier period, Rambus earned an adjusted 37 cents a share on adjusted sales of $139.2 million.
Complicating matters for investors, Rambus reports results using Generally Accepted Accounting Principles, or GAAP, while most analysts use non-GAAP figures for sales and earnings.
Under GAAP measures, Rambus earned $1.51 a share on sales of $119.8 million in the second quarter. In the year-earlier period, Rambus earned 31 cents a share on sales of $121.1 million. Rambus said its second-quarter revenue was in line, while earnings were at the high end of its outlook.
Rambus makes memory interface chips. Its high-performance memory subsystems alleviate the bottleneck between memory and processing for data-intensive systems, including artificial intelligence applications.
RMBS Stock Falls On Earnings News
Rambus's guidance for operating revenue in the current quarter missed expectations. It forecast $132 million, vs. the consensus estimate for $149.3 million. Weak server sales are weighing on its outlook, analysts said.
On the stock market today, RMBS stock plummeted 12.4% to close at 54.87. During the regular session Monday, RMBS stock advanced a fraction to close at 62.61.
"Rambus delivered a strong second quarter with solid results and execution from the team as we continue to successfully navigate through challenging market conditions," Chief Executive Luc Seraphin said in a news release.
He added, "By delivering the critical chips and IP (intellectual property) that address the growing demand in data center fueled by AI, we are well positioned to drive the company's long-term profitable growth."
Rambus Is On 2 IBD Lists
Rambus is tied for first place among 36 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. RMBS stock has a best-possible IBD Composite Rating of 99.
Further, RMBS stock is on IBD's Leaderboard and Tech Leaders lists.
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