Doom and gloom around Wi-LAN is overdone, says analyst Nagaraj

Wi-LAN’s (Wi-LAN Stock Quote, Chart, News: TSX:WIN) setback in its case against Alcatel-Lucent USA Inc., Ericsson Inc., HTC Corporation and Sony Mobile Communication has cast a pall over the company’s stock in the time since, but this morning’s results show how diverse and stable the company’s business can be, says Industrial Alliance analyst Al Nagaraj.

This morning, Wi-LAN reported results from its Q2, which covers the three months ended June 30th. The Ottawa-based company lost $7.63-million on revenue of $19.9-million, exceeding the company’s own topline guidance of $17.5-million, and Nagaraj’s forecast of $18-million.

CEO Jim Skippen talked about the quarter’s upside.

“Despite unusually high litigation activity targeted at realizing value from our broad portfolio of IP, our business generated $2.1-million from operations during the quarter and returned over $7.1-million to shareholders in dividend and share buyback payments,” he said.

Nagaraj says that things are not be as bad as those bidding shares of Wi-LAN down to recent 52-week lows might believe. He expects that the company will appeal the verdict of the recent trial, and notes that management believes that the ruling from the Markman hearing in its upcoming case against Apple, HTC, HP and Sierra Wireless was favourable.

In a research update to clients this morning, Nagaraj reiterated his BUY recommendation for Wi-LAN and $7.70 one-year target on the stock.

More Cantech Analysts