DSP Group sees slowing demand for digital cordless phones

JERUSALEM, July 29 Mon Jul 29, 2013 10:21am EDT

JERUSALEM, July 29 (Reuters) - Multimedia chip maker DSP Group predicted a drop in third-quarter earnings from a forecast-beating second quarter due to slowing demand for digital cordless phones.

Israel-based DSP makes wireless chips for cordless DECT phones and other consumer telecom products. It has secured five design wins with leading manufacturers for its new voice over Internet processor and supply is expected later in 2013.

"We continue to focus on generating positive operating profitability ... and in executing our business plan in a prudent manner as we expand our reach beyond cordless telephony products to new product lines and market domains that will bring new revenue streams to DSP Group in the longer term," chief executive Ofer Elyakim said on Monday.

DSP said it earned 15 cents a share excluding one-time items in the second quarter, compared with EPS of 2 cents a year earlier. Revenue slipped to $40.7 million from $44.2 million.

The company had forecast revenue of $38 million to $41 million and adjusted EPS of about 11 cents. It attributed the improved profit to efficiency measures in development and production.

DSP sees third-quarter EPS ex-items of 2 cents a share and revenue of $33-$37 million.

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