DSP Group shares fall on weak quarterly outlook
TEL AVIV (Reuters) - Multimedia chip provider DSP Group Inc (DSPG.O) forecast a below-estimate second quarter after it reported a smaller-than-expected loss in the first three months, sending its shares lower.
In a conference call on Monday, DSP said sales of consumer products in Europe, including cordless phones, are expected to be weak.
But the company predicted revenue in the second half of the year would be higher than in the first half, and it expects to post positive operating cash flow for the full year.
The Israel-based maker of wireless chips for cordless DECT phones and other consumer telecom products estimated a loss per share of 5 cents in the second quarter and revenue of $41 million to $47 million.
DSP is forecast to post a loss of 2 cents a share on revenue of $49.4 million, according to Thomson Reuters I/B/E/S.
DSP's shares were down 5.9 percent to $6.35 in early Nasdaq trade.
In the first quarter DSP posted a 5 cent loss per share excluding one-off items, unchanged from a year earlier. Revenue fell 11 percent to $43.5 million.
DSP was forecast to post a loss of 12 cents a share on revenue of $43.2 million. The company said in February it expected first quarter revenue of $41 million to $45 million and a 9 cent loss per share.
"Our first quarter results were better than previously expected, driven by record VoIP (voice over Internet protocol) revenues, higher gross margins and lower operating expenses," Chief Executive Ofer Elyakim said.
The voice over Internet chips, aimed at offices, are incorporated in four of six new phones sold by Panasonic for the office market while Germany's Gigaset also launched a new line of products based on DSP's VoIP chips.
"We remain focused on meeting our objective to generate positive operating cash flows this year and shall continue to closely monitor market trends and implement additional cost cutting measures whenever necessary," Elyakim said.
Operating expenses in the quarter fell 10 percent to 17.7 million.
(Reporting by Tova Cohen; Editing by David Cowell)