Ceva Inc. (Nasdaq:CEVA); LSE:CVA), which provides chip design technologies, mainly for the cellular market, has been on a roll for the past year, due to Apple Computers' launch of the iPhone 7, among other things. The Herzliya-based company, managed by CEO Gideon Wertheizer, reported $17.8 million in revenue for the third quarter, 10% more than in the corresponding quarter last year and slightly higher than the analysts' forecasts.
Ceva's non-GAAP net profit rose to $5.2 million, $0.24 per share, $0.02 more than the analysts' forecasts and 10% more than in the third quarter of 2015. GAAP net profit was $3.4 million, up 2%, compared with the corresponding quarter last year. Revenue in the first nine months of the year rose 18.7% to $51.5 million, and GAAP net profit leaped 97.5% to $7.9 million.
Ceva's chip technologies are designed mainly for the cellular market, but the company is taking steps to expand into additional fields, such as the Internet of Things (IoT). Company management said that two of its customers had begun to supply significant quantities of communications chips for new smartphones in the third quarter, one of which was Apple's recently launched iPhone 7. The other customer involved has earmarked the chips for the medium and lower-end market.
In a conference call following the publication of its financial results, the company said that it expected sales of devices containing its chips to top one billion units, causing growth of over 40% in royalties revenue in the fourth quarter and the year as a whole. Ceva predicted fourth quarter revenue would set a record of $18.5-19 million, 18% more than in the fourth quarter of 2015, and that gross profit would total 92% of turnover. Per-share profit is slated to reach $0.24-0.26, with company revenue and net profit for 2016 as a whole projected to grow by 18% and 60%, respectively.
Leaders in supplying digital signals processors
"During the quarter, we signed agreements with key customers, including a new agreement with a major manufacturer to supply digital signals processors for 5G devices," Wertheizer remarked. "This agreement, on top of our recent triumph in a tender for supplying signals processors for 5G cellular base stations, positions us as the only company supplying digital signals processors for both end-user units and 5G base stations."
Ceva's share price has climbed 130% in recent months, and its market cap has grown to $640 million. Ceva had $145 million in cash as of the end of the third quarter.
Published by Globes [online], Israel business news - www.globes-online.com - on November 2, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016