July 31, 2014 / 2:01 PM / 3 years ago

UPDATE 1-Israel's Ceva misses Q2 estimates, sees stronger Q3

(Adds Q3 EPS outlook, share reaction)

JERUSALEM, July 31 (Reuters) - Israeli mobile chip designer Ceva Inc reported no earnings and missed estimates on Thursday, pulled down by a 28 percent drop in revenue, but predicts a stronger third quarter.

Ceva reported diluted earnings per share were zero, versus EPS of 15 cents a year earlier. Revenue dipped to $9.2 million from $12.8 million, with both licensing and royalty revenue down sharply.

The company was forecast to have earned 4 cents a share ex-items on revenue of $10.55 million, according to Thomson Reuters I/B/E/S. Ceva itself had projected revenue of $10-$11 million and adjusted EPS of 3-5 cents.

“Notwithstanding the challenges we experienced in the second quarter of 2014, we are forecasting record high licensing revenue for the third quarter driven by strong demand for our DSPs (digital signal processors),” said Yaniv Arieli, Ceva’s chief financial officer.

Ceva expects third-quarter revenue of $13.3-$14.3 million, up from $10 million in the same period in 2013. It also foresees adjusted EPS of 8-12 cents, up from 6 cents a year ago. Analysts predict EPS of 11 cents on revenue of $12.6 million.

“Looking ahead, we are seeing a good licensing pipeline and improved visibility for the upcoming quarter,” said Gideon Wertheizer, Ceva’s chief executive. “We are expecting sequential royalty revenue growth driven by an increase in baseband shipments.”

Ceva’s Nasdaq-listed shares were 1.4 percent lower in early trade. (Reporting by Steven Scheer)

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