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InterDigital (IDCC) Beats Q1 Earnings & Revenue Estimates

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InterDigital, Inc. (IDCC - Free Report) reported healthy first-quarter 2021 results, wherein both the bottom and the top lines beat the respective Zacks Consensus Estimate.

This Wilmington, DE-based wireless R&D company’s share price moved up 1.4% on May 6, closing the trading session at $69.32.

Net Income

Net income in the March quarter was $5.6 million or 18 cents per share compared with $116K in the prior-year quarter. The improvement was largely driven by higher operating income and lower interest. Also, the bottom line beat the Zacks Consensus Estimate by 19 cents, delivering a surprise of 1,900%.

InterDigital, Inc. Price, Consensus and EPS Surprise InterDigital, Inc. Price, Consensus and EPS Surprise

InterDigital, Inc. price-consensus-eps-surprise-chart | InterDigital, Inc. Quote


Quarterly total revenues grew to $82.4 million from $76.2 million in the prior-year quarter. The growth shows that InterDigital is benefiting from a more diverse licensing program, along with the strength of its operating model. Also, the top line surpassed the consensus estimate of $80 million.

While total revenues from patent royalties equaled $80.2 million, the same from current technology solutions was $2.2 million. Recurring revenues were $78.6 million compared with $75.5 million a year ago.

The company is focused on pursuing agreements with unlicensed customers in the handset and consumer electronics markets.

Other Details

Total operating expenses declined to $70.4 million from $71.5 million in the prior-year quarter. This resulted from lower patent administration and licensing expenses, and SG&A expenses. Operating income improved to $12 million from $4.7 million, driven by higher revenues and lower operating expenses.

Cash Flow & Liquidity

During the first quarter, InterDigital utilized $9.8 million of cash from operating activities compared with cash utilization of $26.9 million in the year-ago quarter.

Free cash flow was a negative $19.8 million compared with a negative $34.7 million a year ago. The change was primarily driven by the timing of collections under fixed-fee agreements.

As of Mar 31, 2021, the company had $884.7 million in cash, cash equivalents and short-term investments with $463.9 million of long-term debt and other liabilities. This compares with the respective tallies of $926.6 million and $415.9 million at the end of the previous quarter.

Zacks Rank & Stocks to Consider

InterDigital currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader industry are Vicor Corporation (VICR - Free Report) , Cogent Communications Holdings, Inc. (CCOI - Free Report) and Western Digital Corporation (WDC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Vicor delivered a trailing four-quarter earnings surprise of 80.6%, on average.

Cogent delivered a trailing four-quarter earnings surprise of 29%, on average.

Western Digital delivered a trailing four-quarter earnings surprise of 26.3%, on average.

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