"We had an outstanding quarter, with an orders backlog among the best ever. With our guidance for the rest of the year, 2014 is turning from another stagnant year to a year of growth, and that wasn't how I saw the situation three months ago," Ceva Inc. (Nasdaq:CEVA); LSE:CVA) CFO Yaniv Arieli said today on the release of the company's third quarter financials.
Ceva provides semiconductor design technologies, chiefly for mobile telephones. After disappointing the market in the previous quarter, this time the company's results beat the analysts' consensus estimate on both the revenue and earnings lines.
Revenue for the third quarter of 2014 was $14.1 million, representing an increase of 41% compared with the $10.0 million for the third quarter of 2013. Licensing and related revenue for the third quarter of 2014 was $8.7 million, an increase of 121% compared with the $3.9 million reported for the third quarter of 2013. Royalty revenue for the third quarter of 2014 was $5.4 million, representing a decrease of 11% compared with the $6.1 million reported for the third quarter of 2013.
On a GAAP basis, net profit for the third quarter of 2014 was $0.7 million, which compares with a net loss of $0.3 million reported for the same period in 2013. GAAP-based diluted earnings per share for the third quarter of 2014 were $0.03, compared with a diluted loss per share of $0.01 for the third quarter of 2013.
Non-GAAP net profit and earnings per share for the third quarter of 2014 were $2.4 million and $0.12, respectively, representing an increase of 87% and 100%, respectively, over the $1.3 million and $0.06 reported for the third quarter of 2013. Ceva thus beat the analysts' earnings per share estimate by $0.02, and reached the upper end of its own guidance.
For the fourth quarter, Ceva sees revenue of $12.8-13.8 million, and non-GAAP earnings per share of $0.06-0.08. The guidance is in line with analysts' estimates. If the guidance is met, Ceva will record total revenue of about $50 million for 2014, and a net profit of $6.9-7.3 million, representing 2.2-3.9% growth in revenue, but a 40% drop in profits in comparison with last year. The decline, which does not come as a surprise, is explained by changes in Ceva's market, among them the exit of Broadcom, one of Ceva's customers, from the mobile market.
Ceva CEO Gideon Wertheizer said, "Our third quarter results were driven by the strongest licensing quarter in the company's history. We continue to experience a healthy demand for our products from new customers targeting a broad range of end markets. We are encouraged by our customers' progress in LTE and low cost smartphone shipments, both of which delivered quarter-over-quarter and year-over-year unit growth."
On the company's cash position, Arieli said, " Our overall financial position remains robust with our cash balances, marketable securities and bank deposits totaling $128 million at the end of the quarter, post-acquisition related payments, net of cash acquired, of approximately $12 million for RivieraWaves. In addition, we bought back approximately 300,000 shares of CEVA common stock during the quarter for an aggregate consideration of $4.4 million. From the recent July 2013 plan, we successfully repurchased two million shares of our common stock for an aggregate consideration of $30.6 million. We are pleased to announce that our board of directors approved a new repurchase plan for an additional one million shares."
Published by Globes [online], Israel business news - www.globes-online.com - on October 30, 2014
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