DSP Group Inc. (Nasdaq: DSPG) revised its 2010 revenue guidance to $222-226 million as customers whittle down inventory. The guidance is below the analysts' consensus of $239 million, though the figure is based on an average of two estimates.
DSP Group CEO Ofer Elyakim added that the company began shipments of its XpandR integrated circuits for the anticipated Android cordless phone and other telephony products, such as Wi-Fi phones.
The provider of wireless chipset solutions for converged home communications posted $65.1 million revenue for the third quarter of 2010, 1% less than the $65.5 million for the corresponding quarter of 2009. The company missed the analysts' consensus of $65.3 million.
Non-GAAP net profit, however, rose to $6.5 million ($0.27 per share) from $4.3 million for the corresponding quarter. The company handily beat the analysts' earnings per share consensus of $0.20.
Elyakim said, "Following a capacity shortage during the first nine months of this year, many customers were prompted to procure materials earlier in order to secure capacity. Now with capacity stabilizing, we are seeing a depletion of this safety stock inventory, which according to our checks, should be mostly exhausted during the fourth quarter. As a result of that inventory buildup, our customers' projections for the fourth quarter have decreased. The company now expects revenues for the year to be in the range of $222 million to $226 million, representing an annual growth rate in the range of 5-7% in comparison with 2009."
DSP Group's share closed at $7.51 on Nasdaq yesterday, giving a market cap of $176 million, and rose 3.1% in premarket trading today.
Published by Globes [online], Israel business news - www.globes-online.com - on October 25, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010