Immersion Q3 Revenue Beats Estimates, Dividend Increases As Meta Lawsuit Continues
Portfolio Pulse from Akanksha Bakshi
Immersion Corporation (NASDAQ:IMMR) reported a decline in Q3 FY23 revenue by 32.3% year-over-year to $9.48 million, surpassing consensus estimates of $7.35 million. Royalty and license revenues decreased compared to the previous year, and adjusted EPS fell from $0.25 to $0.12. Operating income also declined by 40.4% Y/Y, with a reduced margin. IMMR repurchased shares and reduced operating expenses. The company announced a 50% increase in its quarterly dividend to $0.045 per share. Immersion is pursuing legal action against Meta Platforms, Inc. for alleged patent infringement. IMMR shares dropped by 7.23% to $6.22.
November 13, 2023 | 4:02 pm
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NEGATIVE IMPACT
Immersion Corporation reported better-than-expected Q3 revenue and increased its dividend, but shares fell due to overall performance decline and ongoing litigation with Meta.
Despite the positive news of revenue beating estimates and a dividend increase, the significant year-over-year decline in revenue, EPS, and operating income, coupled with the ongoing lawsuit against Meta, likely contributed to the negative investor sentiment, resulting in a drop in share price. The repurchase of shares indicates a potential confidence in the company's value by management, but the legal uncertainties and performance issues seem to overshadow this factor in the short term.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 100