Rambus Earnings Decline

Rambus Inc., which sells computer-chip designs to Sony Corp. and Toshiba Corp., said Monday that fiscal first-quarter net income fell as it spent more on research and development.

Net income declined to $5.53 million, or 6 cents a share, compared with $6.17 million, or 6 cents, a year earlier, the company said. Sales in the period ended Dec. 31 rose 3.4% to $25.7 million from $24.9 million.

Development expenses increased 27% to $6.52 million. Rambus designs semiconductors for products that process complex graphics such as Sony’s PlayStation 2 video game console. Rambus said last week that Sony and Toshiba would use its latest designs.

Second-quarter profit will be 5 cents a share, and sales growth will be 7% to 11% from the first quarter, Chief Financial Officer Robert Eulau said during a conference call.

Litigation expenses increased to $4.5 million from $2.8 million in the fourth quarter, about even with year-earlier levels. Los Altos-based Rambus is involved in lawsuits in the United States and Europe with chip makers including Micron Technology Inc., which have refused to pay royalties.

The Federal Trade Commission has accused Rambus of destroying documents related to patents the company holds. Rambus has denied any wrongdoing, and the civil fraud case is pending. The FTC could prevent Rambus from collecting as much as $100 million in annual royalties from companies that have licensing agreements.

Royalties rose 12% from a year earlier to $24.3 million.

Rambus shares increased 22 cents to $8.40 in regular Nasdaq trading before the report.