WiLAN shares jump after Ottawa patent firm posts $8.6M Q4 profit

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Investors in Ottawa-based patent licensing firm WiLAN (TSX:WIN) (NASDAQ:WILN) pushed the company’s shares up more than seven per cent on Thursday following a positive earnings “surprise.”

The company said it had net earnings of $8.6 million in the three-month period that ended Dec. 31, 2016. That’s up from $3 million a year earlier.

Revenues, meanwhile, were up more than 16 per cent to $30 million.

“2016 ended on a positive note with a strong quarter,” WiLAN CEO Jim Skippen said in a statement. “During the year we added several exciting patent portfolios to our already substantial and valuable holdings, reflecting investment in our future.”

WiLAN owns a portfolio of semiconductor, wireless, digital TV and other patents that it licenses to other companies, sometimes under the threat of litigation.

While the company has its detractors who call it and similar firms “patent trolls” that simply profit off the research of others without actually contributing anything to the tech ecosystem, WiLAN views itself as a defender of intellectual property rights.

Looking ahead, WiLAN says it will be “patient” in its licence negotiations in order to derive “fair value” for its patents. The company cautioned that this may lead to variability in its quarterly earnings.

However, Mr. Skippen noted that this isn’t always a bad thing.

“While financial performance has been lumpy in the past five quarters, in three of those quarters we have generated positive revenue surprises,” he said.

For the year as a whole, WiLAN recorded a 10 per cent increase in net earnings, which reached $11.1 million, on revenues of $92.9 million.

WiLAN shares rose as high as $2.28, up 7.5 per cent, soon after the Toronto Stock Exchange opened. The stock lost some of those gains and was trading at $2.22, up five per cent, in late afternoon trading.