Shares in Israeli mobile semiconductor company Ceva Inc. (Nasdaq:CEVA); LSE:CVA) have risen sharply in early trading on Wall Street after the release of the company's second quarter results and third quarter guidance. The share price is currently up nearly 10%, at $32.01.
Ceva reported second quarter revenue of $17.1 million, representing a 28% increase compared with the $13.4 million reported for the second quarter of 2015. Royalty revenue for the second quarter of 2016 was $9.6 million, up 69% in comparison with the second quarter of 2015.
GAAP-based net profit for the second quarter of 2016 was $2.7 million, which compares with $0.2 million in the corresponding quarter of 2015. GAAP-based diluted earnings per share for the second quarter of 2016 were $0.13, up 1200% in comparison with the $0.01 reported for the second quarter of 2015.
Non-GAAP net profit and diluted earnings per share for the second quarter of 2016 were $4.6 million and $0.21, representing a 263% and 250% increase, respectively over the $1.3 million and $0.06 reported for the second quarter of 2015.
The consensus analysts estimate was for earnings per share of $0.18 on revenue of $17.1 million.
In its guidance, Ceva projects third quarter revenue of $17.2-$18.2 million, which compares with $16.2 million in the third quarter of 2015. It sees earnings per share of $0.21-0.23, similar to the $0.22 reported for the third quarter of 2015. The company sees annual royalties growing 35-45% as it takes a rising share of the fourth generation (LTE) smartphone market. Its market share in the second quarter of 2016 was 19%, almost quadrupling its 5% share in the corresponding quarter.
Ceva CEO Gideon Wertheizer said, "We are very pleased with our performance for the quarter. We delivered record revenue for the second quarter in succession as royalties derived from LTE smartphones powered by our DSPs grew considerably. We continue to experience a healthy licensing environment and a stronger-than-normal sales pipeline as we capitalize on the accelerated industry transition towards ubiquitous connectivity and machine learning."
CFO Yaniv Arieli said, "With a record fifty-six million CEVA-powered LTE chips shipped in the quarter, we were able to more than offset the traditional seasonal weakness of the second quarter and deliver a 23% sequential increase in royalty revenues, which contributed to overall profitability. At the end of the quarter, our cash balance, marketable securities and bank deposits totaled $138 million."
Published by Globes [online], Israel business news - www.globes-online.com - on August 3, 2016
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