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Rambus beats the Street

Memory maker Rambus beat analysts' fourth-quarter expectations by 2 cents today, on earnings of 10 cents per share.

Memory maker Rambus beat analysts' fourth-quarter expectations by 2 cents today, on earnings of 10 cents per share.

For the fourth fiscal quarter, Rambus reported net earnings of $2.7 million, or 10 cents per share diluted, on revenues of $12.3 million. A poll of analysts on First Call anticipated earnings of 8 cents a share. For the same time last year, Rambus pulled in net income of $2 million, or 7 cents a share, on $9.7 million in revenue.

Overall, the company reported fiscal year earnings of $8.7 million, or 35 cents a share, on revenues of $43.4 million.

Rambus specializes in designing fast memory for computers. Many believe that this memory, called "Rambus RDRAM," will replace standard PC memory, or SDRAM, and become the most widely used memory inside PCs in the near future. Rambus gets its revenue by licensing its designs to memory manufacturers such as Samsung and Micron.

Intel, among other chipmakers, has chosen to adapt their products to the Rambus memory standard, which gives the company, theoretically, a built-in market.

The road to riches, however, has not been easy. Memory based around the Rambus design has been plagued with glitches, controversy, and delays. Memory manufacturers have grumbled about the costs required in buying equipment for testing and making Rambus memory. Computer makers have also complained about the cost, while some analysts have stated that the benefits of the new technology won't be that spectacular.

The latest snafu came at the end of September, when Intel delayed its 820 chipset because of a bug. The 820 chipset is the first part from Intel that will enable PC makers to adopt the new memory. The delay of the 820 caught many by surprise and several PC makers had to suddenly halt the launching of their latest and greatest PCs. Some, however, such as IBM, went ahead with new PCs based on standard memory.

Rambus's stock dived the next day. Samsung stopped making Rambus chips soon afterward and said it wouldn't restart until the 820 problem was fixed.

While skepticism still reigns, Paul Otellini, general manager of the Intel Architecture Business Group, earlier in the week said that some form of the 820 will come out this quarter. As a result, PC makers might be able to squeeze out systems this year.