June 2, 2009 / 9:26 PM / 10 years ago

UPDATE 1-Tessera raises Q2 revenue view on Motorola deal

* Motorola to pay royalties on certain product shipments

* Raises Q2 total rev view above analysts’ expectations

* Shares rise 13 pct in after-market trade

June 2 (Reuters) - Tessera Technologies Inc TSRA.O said Motorola Inc MOT.N signed an agreement to license the chipmaker’s technology, settling all outstanding litigation between the companies, sending the chipmaker’s shares up 13 percent.

Tessera also boosted its second-quarter revenue outlook as it expects the agreement to add to its royalty and license-related revenue.

Based on the ‘pre-negotiated’ agreement, the largest U.S. handset maker will pay Tessera royalties on shipments of certain electronic products that incorporate unlicensed chips that use the company’s patented TCC technology, the company said in a statement.

The deal follows the U.S. International Trade Commission’s final verdict in May which found Qualcomm (QCOM.O), Motorola MOT.N and others infringed Tessera’s TSRA.O patents on technology used to package semiconductor chips.

Motorola was faced with a possible interruption in supply as the ruling also included a ‘cease and desist’ order prohibiting Motorola, Qualcomm, Freescale, and Spansion from using their U.S.-based inventory to ship the infringing products.

Tessera said it now expects second-quarter total revenue between $59.0 million and $61.0 million, compared with its prior view of $46.0 million and $49.0 million.

Analysts on average were expecting revenue of $47.8 million, according to Reuters Estimates.

Micro-electronics revenue, all of which will be royalty and license related, will be $53.0 million to $55.0 million, compared with the prior outlook of 40.0 million to $42.0 million, Tessera said.

Tessera shares were up by $3 at $27.45 in trading after the bell. They closed at $24.45 Tuesday on Nasdaq.

Shares of Tessera rose about 13 percent to $27.50 in trading after the bell. (Reporting by Bijoy Koyitty in Bangalore; Editing by Saumyadeb Chakrabarty)

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