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Rambus profit leaps, but misses targets

Rakes in $27 million in royalties

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Rambus saw profit rise 191 per cent to $13 million for the first quarter, but slightly missed Wall Street expectations.

The chip designer recorded sales of $34.7 million for the period ended December 31, compared to $11.9 million for the same period in 1999. Earnings were 12 cents a share, a penny less than forecast - the California company said it would have hit expectations if it wasn't for a higher tax rate (40 per cent, up from 35 per cent).

Contract revenue grew to $7.9 million, compared to $7 million in the previous quarter.

Included in the sales were $26.8 million in royalties for its technology from chipmakers - this revenue grew tenfold from the previous year, and 35 per cent from the previous quarter.

"We are pleased with the market reception for both the Sony PlayStation 2 and the Intel Pentium 4, and we are confident that these products will drive the demand for RDRAM-compatible ICs to higher levels in fiscal 2001," said Rambus CEO Geoff Tate.

He went on to warn that, due to falling SDRAM prices in December, royalties were not expected to rise in the current quarter from Q1 - unless Rambus managed to recruit fresh blood for its customer base.

The company also said costs would increase in the short term due to its various legal spats with the industry over patents, as well as a move to bigger facilities. ®

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