Tessera Craters; Q4 Outlook Disappoints

Tessera Technologies (TSRA) shares are getting pounded after hours on a weaker-than-expected Q4 outlook.

The company, an semiconductor IP licensing company, posted Q3 revenue of $66.1 million, a bit ahead of the Street at $65.7 million, while non-GAAP profits of 37 cents a share were well ahead of the Street at 21 cents.

However, the company sees Q4 revenue of $60 million to $62 million, down sequentially and below the Street at $70 million. Tessera said it has two major DRAM customers with volume-based pricing incentives “that will reduce the company’s revenue sequentially” in the quarter. Tessera notes that it recognizes revenue one quarter in arrears.

In late trading, TSRA is down $4.31, or 16.1%, to $22.55.