JERUSALEM, Oct 31 (Reuters) - Multimedia chip maker DSP Group forecast weaker fourth-quarter earnings as it topped third-quarter estimates despite slowing demand for cordless telephones.
Israel-based DSP, which makes wireless chips for cordless DECT phones and other consumer telecom products, predicts it will earn 3 cents a share excluding one-time items in the October-December period on revenue of $33-$37 million.
In the fourth quarter of 2012, it posted a gain of 6 cents a share and revenue of $38.4 million.
Helped by a cost-cutting programme, DSP reported profit ex-items of 8 cents a share in the third quarter, versus 1 cent in the year-earlier period. Revenue slipped 4 percent to $35.4 million.
“Despite softer market demand for cordless telephony products, we managed to surpass the mid-point of our revenue projection and exceeded our guidance in almost every financial metric,” said DSP Chief Executive Ofer Elyakim on Thursday.
“We have achieved increasing recognition and acceptance for our new products and technologies,” he said.
The company had previously forecast revenue of $33-$37 million and adjusted earnings per share of 2 cents. Analysts had predicted quarterly EPS of 1 cent and revenue of $35.20 million, according to Thomson Reuters I/B/E/S.
Elyakim told a conference call of analysts the company would benefit in the coming quarters from a new voice recognition chip that neutralises background noise in mobile phones. Device makers and mobile operators are looking to improve the quality and applications for voice, he said.
DSP’s Nasdaq-listed shares were up 2.6 percent to $7.50 in morning trade.