(Adds Q2 outlook, share reaction, CEO comments from conference
JERUSALEM May 1 Multimedia chip maker DSP Group
on Thursday reported lower first quarter net profit as
excess inventories led to a drop in sales.
DSP said on Thursday it earned 3 cents per diluted share
excluding one-time items in the quarter, compared with 11 cents
a share a year earlier. Revenue fell 17 percent to $32.9
million, the middle of DSP's own forecast of $30-$35 million.
Israel-based DSP, which makes wireless chips for cordless
DECT phones and other consumer telecom products, had also
expected earnings per share of 1 cent ex-items.
"We believe that the excess inventory depletion cycle which
negatively impacted revenues in the first quarter, as originally
expected, is now behind us and we are well positioned for
sequential revenue growth in the second quarter," said Ofer
Elyakim, DSP's chief executive.
DSP in a conference call with analysts projected
second-quarter revenue of $34-$38 million, compared with $40.7
million a year ago. It also estimates EPS of 5-6 cents, versus
15 cents in the second quarter of 2013.
He said the company would soon start benefiting from a new
chip that neutralises background noise in mobile phones. The
chip, which will be integrated into several models of leading
makers of smartphones, will be available later this year,
"Device manufacturers and cellular operators are working to
improve the quality and applications of voice through increased
adoption of advanced processing technologies and DSP will
benefit from this trend," he said.
DSP's Nasdaq-listed shares were up 1.9 percent at $8.11 in
(Reporting by Steven Scheer; Editing by Tova Cohen)