Shares of Rambus Inc. RMBS plunged more than 11% in after-hours trade yesterday in response to the modest first-quarter 2016 results and tepid second-quarter 2016 revenue outlook.Rambus’ adjusted earnings per share (including stock-based compensation but excluding all one-time items) of 11 cents came ahead of the Zacks Consensus Estimate of 9 cents. However, reported earnings compared unfavourably with the year-ago quarter figure of 12 cents. The year-over-year decline was mainly due to lower revenues and higher cost of sales.Quarter DetailsTotal revenue for the quarter decreased a marginal 0.3% year over year to $72.7 million. The decrease was mainly due to lower-than-expected patent royalty revenues.However, reported revenues were within management’s guided range of $71 million and $75 million and almost in line with the Zacks Consensus Estimate of $73 million.Total operating costs and expenses of $63.4 million were 15.2% higher than the year-ago quarter, primarily due to higher headcount related costs owing to the Smart Card Software acquisition.Excluding one-time items but including stock bases compensation expenses, total operating costs and expenses increased nearly 10.6% year over year to $53.9 million. As a percentage of revenues, it increased 732 basis points to 74.1%.This, in turn, negatively impacted operating results. Adjusted operating income (including stock-based compensation but excluding all one-time items) came in at $18.8 million compared with $24.2 million in the year-ago quarter, decreasing 22.3% year over year. Adjusted operating margin was 25.9% compared with 33.2% a year ago.On a GAAP basis, net income was approximately $6.4 million, which decreased from $14.9 million reported last year. Also, net income on an adjusted basis (including stock-based compensation but excluding all one-time items) was $12.1 million compared with $16.3 million.Rambus exited the quarter with cash, cash equivalents and marketable securities of roughly $225.6 million, down from $287.7 million in the previous quarter.GuidanceFor the second quarter, the company expects revenues between $72 million and $77 million, lower than the Zacks Consensus Estimate of $79 million. Total operating expense is expected to be in the range of $49 million and $52 million. Operating income for the second quarter is expected to be between $20 million and $28 million.Full year revenues are projected within $310 million to $325 million (mid-point $317.5 million), slightly higher than the Zacks Consensus Estimate of $317 million at its mid-point.Our TakeRambus reported modest first-quarter results with the bottom line beating the Zacks Consensus Estimate and the top line almost matching the same. Quarterly revenues and earnings declined from the year-ago period. Also, the company provided a tepid second-quarter 2016 revenue guidance.Nonetheless, Rambus is poised well to capitalize on the rising popularity of energy-efficient lighting, LED products in the latest architectural, retail, commercial and residential lighting fixtures. The recent acquisition of Smart Card Software will enhance its product offerings, thereby boosting its top and bottom line performance over the long run, in our view.Rambus is going through a restructuring phase and we expect it to yield favourable results. Additionally, licensing agreements — the result of successful monetization of Rambus’ patents — remains a recurring revenue source.However, competition from Semiconductor Manufacturing International Corp. SMI and Advanced Micro Devices AMD and customer concentration remain headwinds for the company.Currently, Rambus has a Zacks Rank #3 (Hold). A better-ranked stock in the technology sector is Lexmark International Inc. LXK, sporting a Zacks Rank #1 (Strong Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RAMBUS INC (RMBS): Free Stock Analysis Report SEMICON MFG-ADR (SMI): Free Stock Analysis Report ADV MICRO DEV (AMD): Free Stock Analysis Report LEXMARK INTL (LXK): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research