February 10, 2010
-(Dow Jones)- U.K. bluetooth specialist CSR PLC (CSR.LN) Wednesday said it is bullish on prospects for the wireless technology market this year and beyond, but forecast a dip in first-quarter revenue from the previous quarter due to concerns about the strength of the economic recovery.
The positive technology market outlook underscores what analysts say may be a rebound in the tech sector after Nokia Corp. (
NOK: 13.12, -0.21, -1.58%), the world's largest handset maker, and German chip maker Infineon Technologies AG (IFX.XE) both posted consensus-beating results last month.
CSR Wednesday said it is expecting demand for bluetooth devices to move beyond mobile phone handsets to a much wider array of consumer devices and wider use in the automotive industry.
Chief Executive Van Beurden told Down Jones Newswires that CSR has plenty of room for expansion in the bluetooth connectivity market as it continues to expand its product portfolio. He added that recent research has indicated 15%-30% growth in the connectivity market over the next three years.
Despite the favorable market outlook, CSR has penciled in first-quarter revenue between $160 million and $175 million, which is down from the fourth quarter. Revenue was $80.6 million in the first quarter of 2009.
"For 2010, we naturally have caution about the global economic outlook, but we believe that the market for connectivity, location and audio platforms will show significant growth by value this year and, indeed, beyond," said Van Beurden.
"We're confident with respect to our market position, although suppliers are keeping their inventories lean at present and we're yet so see a return to 2008 levels," Van Beurden added.
CSR, which reported fourth-quarter results earlier Wednesday, swung to a pretax profit of $21.9 million for the three months to Jan. 1, from a $15.8 million loss a year earlier as revenue increased 41% to $198.1 million. Its diluted earnings per share were 11 cents, compared with a 5 cent loss a year earlier.
At 1145 GMT, CSR's shares were trading up 35 pence, or 8%, at 479 pence after fourth-quarter revenue came in at the upper end of the company's guidance and it also increased its gross margin.
Its fiscal fourth-quarter revenue was boosted by a $68.6 million contribution from its acquisition of SiRF, which completed in October last year. However, revenue was down from the $209.9 million it posted in its fiscal third quarter, a period that is historically boosted by strong orders by retailers in the run up to Christmas.
The results came at the top line of expectations but "significantly ahead in terms of profitability," said Seymour Pierce analyst, Ian Robertson who penciled in revenue $200 million. Robertson has a 'Buy' recommendation on the stock with a 530 pence target price.
Panmure Gordon analyst Nick James said the company continues to secure new design wins for its latest products, which should enable it to gain market share in a growing market. James upgraded his price target to 570 pence from 550 pence.
The company, which has been hit by the U.K. recession, described 2009 as challenging due to the decline in consumer spending.
CSR has a market capitalization of GBP800 million, and has a broad range of customers including Nokia , HPQ, MSFT, Sony ...
2nd UPDATE: CSR Bullish On Technology Market, But Sees 1Q Revenue Dip - FOXBusiness.com
CSR PLC ORD 0.1P - London Stock Exchange
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