TSRA--Tessera Tech beats by $0.01, reports revs in-line; guides Q1 revs above consensus; guides Q2 (Jun) revs above consensus Reports Q4 (Dec) earnings of $0.27 per share, $0.01 better than the First Call consensus of $0.26; revenues rose 5.6% year/year to $53 mln vs the $52.7 mln consensus. Co issues upside guidance for Q1, sees Q1 revs of $55-57 mln vs. $52.40 mln consensus. Non-GAAP operating expenses for the first quarter are projected to be approx $25.5 mln, excluding litigation expenses but including expenses the company expects to incur as a result of its FotoNation acquisition. Litigation expenses are projected to range from $10 mln to $15 mln.
The company's book tax rate is projected to be 43 percent of pre-tax profit, but could be higher depending on the magnitude of the charge for in-process research and development. Cash taxes are projected to approximate $3.3 mln in the first quarter. The fully diluted share count is expected to be 50 mln shares. Co issues upside guidance for Q2 (Jun), sees Q2 (Jun) revs of $53.55 mln vs. $52.65 mln consensus.
As mentioned at 16:05 the co announced it has entered into a definitive agreement to acquire FotoNation and expects the transaction to close in February, 2008. The co expects the FotoNation acquisition will be neutral to 1-2 cents dilutive to non-GAAP earnings for the full year 2008 and accretive thereafter.
In the first quarter of 2008, as a result of the acquisition Tessera anticipates recording a non-cash charge to GAAP earnings for in-process research and development. While revenues will not be material to Tessera near term, the co is confident FotoNation will contribute meaningfully to its long-term consumer optics royalties and license fees.
Implication
An Ascending Continuation Triangle is considered a bullish signal. It indicates a possible continuation of the current uptrend.
Description
An Ascending Continuation Triangle shows two converging trendlines. The lower trendline is rising and the upper trendline is horizontal.
This pattern occurs because the lows are moving increasingly higher but the highs are maintaining a constant price level.
Important Characteristics
Following are important characteristics about this pattern.
Technical analysts pay close attention to how long the Triangle takes to develop to its apex. The general rule is that prices should break out - clearly penetrate one of the trendlines - somewhere between three-quarters and two-thirds of the horizontal width of the formation. The break out, in other words, should occur well before the pattern reaches the apex of the Triangle. The closer the breakout occurs to the apex the less reliable the formation.
The Triangle is a relatively short-term pattern. It may take between one and three months to form.
The horizontal top trendline need not be completely horizontal but it should be close to horizontal.
Investors should see volume decreasing as the pattern progresses toward the apex of the Triangle. At breakout, however, there should be a noticeable increase in volume.
Consider the duration of the pattern and its relationship to your trading time horizons. The duration of the pattern is considered to be an indicator of the duration of the influence of this pattern. The longer the pattern the longer it will take for the price to move to the target price. The shorter the pattern the sooner the price move. If you are considering a short-term trading opportunity, look for a pattern with a short duration. If you are considering a longer-term trading opportunity, look for a pattern with a longer duration.
The target price provides an important indication about the potential price move that this pattern indicates. Consider whether the target price for this pattern is sufficient to provide adequate returns after your costs (such as commissions) have been taken into account. A good rule of thumb is that the target price must indicate a potential return of greater than 5% before a pattern should be considered useful. However you must consider the current price and the volume of shares you intend to trade. Also, check that the target price has not already been achieved.
This pattern with its increasingly higher lows and constant highs indicates that buyers are more aggressive than sellers. The pattern forms because of a supply of shares is available at a fixed price. When the supply depletes, the shares quickly breakout from the top trendline and move higher.
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