Shares of Tessera Technologies Inc. TSRA gained over 4.5% in yesterday’s trade following better-than-expected results for the first quarter of 2016 announced on May 2 after the markets closed.The leading chip packaging and interconnect solutions provider beat the Zacks Consensus Estimate on both the top and bottom lines.Adjusted earnings of 43 cents per share surpassed the Zacks Consensus Estimate by 10.3% or 4 cents. Revenues of $60 million beat the consensus mark of $57 million by 5.3%.RevenuesTessera’s revenues came ahead of its own guidance range of $55–$59 million. Revenues were down 3.0% sequentially and 24.9% year over year. The weakness versus a year ago was on account of the decline in episodic revenue, which went from $28 million to $5.4 million. Recurring revenue grew 5.3%.MarginsOwing to the high percentage of licensing revenues, Tessera usually generates very strong gross margins. Accordingly, Tessera’s first quarter gross margin was 99.9%, up 17 basis points from 99.7% reported in the previous quarter.Tessera’s quarterly operating expenses were $27.7 million, up 25.2% from $22.1 million last quarter and 21.2% from the year-ago tally of $22.9 million. Operating expenses comprise year-over-year increase of $2.0 million in litigation expense, $1.3 million in amortization expense, and $2.7 million in research and development.Litigation expenses of $6.6 million were up from $4.5 million in the first quarter of 2015 due to increased case activity.Net IncomeNet income was $22.1 million or earnings of 43 cents a share, compared with $26.6 million or earnings of 53 cents in the prior quarter and $38.7 million or earnings of 72 cents last year. Earnings plunged 15.4% sequentially and 39.5% year over year. On a GAAP basis, net income was $18.1 million or earnings of 36 cents compared with $22.8 million or earnings of 44 cents in the prior quarter and $35.6 million or earnings of 66 cents in first quarter 2015.Balance Sheet and Cash FlowIn the first quarter, current assets were worth $392.8 million, down $18.9 million sequentially. Cash, cash equivalents and short-term investments as of Mar 31, 2016 were $363.4 million, down $18.3 million from the Dec 31, 2015 level. The company had no debt.Share Repurchase & DividendTessera spent $10 million on cash dividends and $36.5 million to repurchase 1.3 million shares in the reported quarter. Further, management declared a cash dividend of 20 cents per share for the first quarter, payable on Jun 14, 2016 to stockholders on record as on May 24.GuidanceFor the second quarter, Tessera expects revenues in a range of $64–$66 million. GAAP earnings per share are expected between 42 cents and 44 cents, and non-GAAP earnings per share within 54-56 cents. Currently, the Zacks Consensus Estimate is pegged at 50 cents.Our TakeTessera posted encouraging first quarter results with both the top line and the bottom line outperforming the respective Zacks Consensus Estimate.Increased technical collaboration, channelized investment toward potential growth areas and patent licensing agreements are helping results. Tessera is also in advanced stages of negotiations with a couple of prospective customers. If they convert, it will be a nice addition to its licensing revenue.Its just-announced deal with leading outsourced assembly and test (OSAT) company ASE is another positive because this could help the company target some high-volume customers.Tessera continues to witness improvement with FotoNation imaging group that recorded highest ever quarterly revenues this quarter. FotoNation collaborated with LG on its latest premium smartphone the LG V10 to expand the limits of mobile phone imaging quality. FotoNation also expanded its relationship with SocioNext to develop image stabilization solutions for the ‘on-the-move’ video devices category.These developments and Tessera’s premium imaging technology reflect that the business will grow significantly in the mobile and adjacent markets.On the new business font, the company recently signed licensing agreement for its ZiBond and Direct Bond Interconnect (DBI) with Sandia National Labs. Concurrent with its first quarter results, the company announced a new Invensas license and development agreement with Advanced Semiconductor Engineering for the commercialization of its Bond Via Array (BVA) technology.On the legal font, Tessera has reached a settlement with UTAC according to which, it will receive $18 million over a period of three years. However, the OVT TSMC patent case and the Toshiba contract case still await settlement.Overall, the company’s internal R&D efforts, Invensas semiconductor packaging, Ziptronix initiatives and FotoNation imaging technologies continue to make solid progress and are expected to drive growth going forward.Tessera shares carry a Zacks Rank #3 (Hold). Better-ranked stocks include Nuance Communications, Inc. NUAN, Fitbit Inc. FIT and NVIDIA Corporation NVDA. While Nuance Communications sports a Zacks Rank #1 (Strong Buy), Fitbit and NVIDIA carry a Zacks Rank #2 (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 TESSERA TEC INC (TSRA): Free Stock Analysis Report NUANCE COMM INC (NUAN): Free Stock Analysis Report NVIDIA CORP (NVDA): Free Stock Analysis Report FITBIT INC (FIT): Free Stock Analysis Report To read this article on Zacks.com click here.