Embedded microprocessor-core supplier MIPS Technologies Inc. missed consensus estimates by a penny, as declining sales of Nintendo Ltd.'s game console hurt the company's royalties.
MIPS, Mountain View, Calif., returned earnings of $10.4 million, a slight 3% decline compared with a year ago. Revenue climbed a scant 1% to $27 million for the company's third fiscal 2000 quarter, as royalty payments fell 22% to $18.1 million based on slowing sales of the Nintendo 64 gaming console.
Contract revenue, meanwhile, skyrocketed 159% to $8.8 million.
Six analysts polled by First Call/Thomson Financial expected MIPS to report 27 cents per share. MIPS fell short, posting EPS of 26 cents.
MIPS now boasts 26 licensees. Chairman and chief executive John Bourgoin noted that royalty revenue first appears, on average, about 18 to 24 months after the initial license is signed. MIPS signed its first licensee 20 months ago, in August 1998. "And the model is v ery powerful in that there are no costs associated with those royalties," Bourgoin said.