January 30, 2013 / 3:15 PM / in 5 years

UPDATE 1-Ceva sees weaker-than-expected Q1, shares slide

* Q4 non-GAAP EPS $0.19 vs $0.19 forecast

* Q4 revenue $13 million versus I/B/E/S view $13 million

* Sees Q1 non-GAAP EPS $0.13-$0.15, revenue $12 mln-$13 mln

* Shares down 10.3 pct on Nasdaq

TEL AVIV, Jan 30 (Reuters) - Israeli mobile chip designer Ceva Inc forecast weaker than expected earnings and revenue in the first quarter as higher sales for smartphones have so far failed to compensate for the decline in prices for chips in second-generation phones.

Ceva is also suffering from a collapse in the market for consumer electronics such as game consoles.

Shares in Ceva were down 10.3 percent to $15.88 in early Nasdaq trade on Wednesday.

Mobile phones accounted for 91 percent of the 303 million devices based on Ceva chips that were sold in the fourth quarter of 2012. Of this amount, nearly 30 percent were third and fourth generation smartphones and the rest were 2G.

Looking further ahead, Ceva said it expects growth in royalties in the second half of 2013.

Chief Executive Gideon Wertheizer said 2012 was a challenging year for both Ceva and the semiconductor industry, significantly more so than was originally anticipated.

“Our licensing revenue was weaker than initially expected, resulting from uncertainty in the macro environment and a prolonged decision-making process by licensees for next-generation products,” he said.

Despite this, Ceva licensed its technologies to major strategic customers and these customers are “laying the foundation that we expect will generate future royalty revenue growth”.

Ceva forecast earnings per share excluding one-time items in the first quarter of 13-15 cents and revenue of $12-$13 million. Analyst on average estimated EPS of 22 cents on revenue of $14 million in the quarter, according to Thomson Reuters I/B/E/S.

Companies such as Intel, Broadcom, Spreadtrum and ST Ericsson license Ceva’s technology to build chips known as digital signal processors (DSP).

Ceva reported fourth-quarter earnings per share excluding one-off items of 19 cents a diluted share, compared with 26 cents a year earlier. Revenue slid 19 percent to $13 million.

The company was forecast to earn 19 cents a share on revenue of $13 million, according to Thomson Reuters I/B/E/S.

During the fourth quarter, Ceva bought back 243,000 of its shares for $3.5 million, bringing the total for 2012 to $27.2 million.

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