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Xperi Corporation (XPER - Free Report) reported second-quarter adjusted earnings of 36 cents per share, surpassing the Zacks Consensus Estimate by 7 cents. Revenues increased 35.8% from the year-ago quarter.

Following the earnings, Xperi’s share price increased 0.51% to $29.60. However, the company’s shares have lost 4.91% year to date versus the 17.1% loss of its industry.

The strong results were driven by strength in the company’s automotive business.

During the quarter, management said that the DTS integration remains well on track. The company achieved 90% of its annualized cost synergy in the second quarter.

Also, Tessera has intensified its IP licensing efforts and is currently working with a number of semiconductor manufacturers and OSATs to enhance its portfolio of advanced packaging and interconnect technologies.

Revenues

Tessera’s revenues of $91.3 million were up 36.3% year over year. Also, revenues were within the company’s guidance range of $88–$92 million.

Margins

Owing to high percentage of licensing revenues, Tessera usually generates strong gross margins. Accordingly, Tessera’s second-quarter gross margin was 98.6%, down 130 basis points from 99.9% reported in the year-ago quarter.

Tessera’s operating expenses (research, development and other related costs & selling, general and administrative) were $59.3 million, up 176.2% year over year. Also, as a percentage of sales, both the expenses increased on a year-over-year basis.

Net Income

Pro forma net earnings were $19.0 million or earnings of 36 cents a share compared with $30.2 million or 60 cents in the year-ago quarter.

On a GAAP basis, net loss was $39.1 million or a loss of 79 cents per share compared with net earnings of $23.5 million or of 48 cents in second-quarter 2016.

Balance Sheet and Cash Flow

At quarter end, cash, cash equivalents and short-term investments were $1.28 billion, up $1.14 billion from the prior quarter.

Dividend

During the quarter, the company approved a regular quarterly dividend of $0.20 per share, payable on Sep 8, 2017, to stockholders of record on Aug 18, 2017.

3Q Guidance

For the third quarter of 2017, Tessera expects GAAP revenues in the range of $90–$97 million. GAAP loss per share is expected between (31) cents and (19) cents, and non-GAAP loss per share are projected in the range of 30–39 cents.

For 2017, the company expects revenues in the range of $370–$445 million.

Tessera Holding Corporation Price, Consensus and EPS Surprise

 

Tessera Holding Corporation Price, Consensus and EPS Surprise | Tessera Holding Corporation Quote

Other Stocks to Consider

Currently, Xperi has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the same space are Lam Research Corporation (LRCX - Free Report) , carrying a Zacks Rank #1 (Strong Buy), and Applied Materials (AMAT - Free Report) and Fortive Corporation (FTV - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Lam Research delivered a positive earnings surprise of 4.44%, on average, in the trailing four quarters.

Applied Materials delivered a positive earnings surprise of 3.35%, on average, in the trailing four quarters.

Fortive Corporation delivered a positive earnings surprise of 5.80%, on average, in the trailing four quarters.

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