Xperi (XPER) Q1 Loss Widens Y/Y, Revenues Down, Stock Falls

Xperi Corporation’s (NASDAQ:XPER) incurred adjusted loss of 67 cents per share in first-quarter 2018 compared with a loss of 22 cents per share in the year-ago quarter. The reported figure came within the guided range of 29-78 cents per share.

Revenues of $65.5 million declined 2.6% year over year and came below the guided range of $83-$138 million. Total billings amounted to $104.3 million, up 4.6% year over year.

Since the first-quarter earnings release on May 3, shares of the company were down 12.6%. So far this year, Xperi has lost 17.4% compared with the industry’s decline of 7.5%.

Operating Performance

Owing to high percentage of licensing revenues, Xperi usually generates strong gross margins. In the fourth quarter, the company’s gross margin was 96.5%, down 140 basis points from 97.9% in the year-ago quarter.

Xperi’s operating expenses (research, development and other related costs & selling, general and administrative) totaled $64.1 million, down 8.9% on a year-over-year basis. As a percentage of sales, research, development and other related costs increased, selling, general and administrative expenses decreased on a year-over-year basis.

Operating loss was $32.5 million compared with $39.9 million in the year-ago quarter. Net loss came in at $33 million compared with $11 million in the year-ago quarter.

Xperi Corporation Net Income (TTM)

Balance Sheet and Cash Flow

At quarter end, cash, cash equivalents and short-term investments were $80.8 million compared with $200.7 million at the end of the fourth quarter of 2017. Long-term debt totaled $480.3 million compared with $545.2 million at the end of the fourth quarter. The company generated $4.7 million in cash from operations in the quarter under review.

Dividends and Share Repurchase

In the fourth quarter, the company repurchased shares for an aggregate amount of $15 million. As of Mar 31, 2018, Xperi had approximately $127.9 million remaining under its current repurchase program. It also paid $9.9 million in dividends.

Guidance

For the second quarter of 2018, the company expects billings between $99 million and $103 million. Non-GAAP operating expenses are envisioned in the range of $62-$65 million.

Upcoming Releases

Investors interested in the broader Business Services sector are keenly awaiting earnings reports from key players like Gartner, Inc. (NYSE:IT) , The Dun & Bradstreet Corp. (NYSE:DNB) and Broadridge Financial Solutions Inc. (NYSE:BR) . While Garter and Dun & Bradstreet will release first-quarter 2018 results on May 8 and May 9, respectively, Broadridge will report third-quarter fiscal 2018 numbers on May 8.

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