Bank of America Merrill Lynch Neutral On Tessera
Bank of America Merrill Lynch is out with a research report on Tessera (NASDAQ: TSRA) and it has a Neutral rating and $15.50 price target on shares.
In a note to clients, Bank of America Merrill Lynch writes, "TSRA reported lower than expected 3Q11 revenue guidance of $60M versus our/Street estimates of $73.5M and $74.6M respectively, driven predominantly by lower than anticipated microelectronics revenue of $50M compared to our $62.5M estimate. Management attributed roughly $8.5M of the sequential decline to volume-based DRAM price breaks for two large customers. DRAM price breaks were triggered earlier this year compared to 2010, as one of TSRA's large customers saw DRAM units increase from 4Q10 to 1Q11, despite the overall industry unit declines caused by the transition from 1GB to 2GB. TSRA expects $13M in price breaks for 2011, compared to the $11M in 2010 which occurred mostly in 4Q10. With limited visibility on next year's contract renewals, we remain on the sidelines."
Shares of TSRA lost $1.05 on Friday to close at $12.52.
