Wireless chipset solutions developer DSP Group Inc. (Nasdaq: DSPG) reported fourth quarter revenue of $43.3 million, down 21% from revenue of $54.7 million in the corresponding quarter of 2009.
Full year revenue for 2010 grew only 6.3% compared with 2009. Looking ahead, the company offered guidance of 2011 revenue in the range of $227-245 million, representing growth of only 0.6-8.7% over 2010 revenue.
Non-GAAP net loss per share in the fourth quarter was $0.17, compared with a $0.12 per share net loss in the corresponding quarter.
DSP Group CEO Ofer Elyakim explained today to "Globes", "The drop in revenue came from an accumulation of inventories at our customers. They thought in the beginning of 2010 that there was going to be a shortage in manufacturing capabilities at producers, so they ordered in advance and built up inventories in the fear that the products wouldn't be able to be supplied in the second half of the year, near the holiday season. Over the course of the fourth quarter the excess inventory was used which led to a drop in new orders, and in the first quarter as well it has been possible to still see the tail end of excess inventory."
Elyakim added, "Our traditional market remains stable. Alongside drops in specific countries, there are rises in developing countries such as China, India, Latin America, and elsewhere. As far as the more advanced chips are concerned, sales in 2010 reached $16 million, and we estimate that sales of those products will approach $30 million in 2011."
Elyakim said with the earnings release that the Consumer Electronics Show in January showed several new products which will be based on DSP Group platforms. "We expect that these new products based on our XpandR, CAT iq and VOIP platforms will be commercially launched during the course of the year, with more product launches expected in the second half of the year," said Elyakim.
DSP Group shares closed last week at $7.56, giving a market cap of $176.6 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 31, 2011
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