News Column

CSR Ups Interim Dividend As Profit Rises Despite Revenue Decline

July 24, 2014

Hana Stewart-Smith

LONDON (Alliance News) - CSR PLC Thursday raised its interim dividend and expressed confidence for a return to growth in its core business, as it saw pretax profit rise in the half year to end-June despite a decline in revenue.

The chip maker posted an interim dividend of USD0.052 per share, up from USD0.045 per share in the previous year.

CSR posted a pretax profit of USD60.8 million, up from USD27.0 million, despite seeing revenue decline to USD374.5 million from USD500.4 million, due to lower cost of sales, a USD23.3 million reversal of non-current asset impairment charges, and a USD15.3 million gain from the sale of its imaging assets.

In its second quarter, the company's revenue declined to USD193.7 million from USD262.5 million the year before, primarily due to a 70% decline in its legacy revenue. CSR forecast revenues between USD200 million to USD220 million forits third quarter.

These legacy products consist of discontinued business lines acquired as part of CSR's merger with Zoran in 2011, as well as the lingering revenues from customers it still supports following the sale of its handset businesses to Samsung in 2012.

The products are gradually phasing out of the business, and made up only 9% of revenue in the second quarter. CSR continues to expect the products to decline by around 70% in 2014 compared to the previous year, and legacy revenue to be minimal during 2015.

Additionally, core revenue declined to USD175.6 million from USD203.1 million in the second quarter, due to weakness in the camera, gaming and non-factory fit auto divisions, as well as the absence of certain one-off revenues in its voice and music segment in the previous year.

However, CSR said expects its core businesses to return to growth during the second half of 2014 and in 2015, as its voice and music division is expected to show strong growth in the third and fourth quarters of this year.

CSR, like may of its peers, is looking to new trends such as wearables and the 'internet of things' as potential opportunities for its business. In February it announced a Bluetooth Smart technology called CSRmesh intended for the internet-of-things market, and said it has seen a high level of interest in the technology.

"I am particularly excited by the customer response for Bluetooth Smart, which includes multiple design wins for CSRmesh, positioning us well for the rapidly developing Internet of Things market for home automation and consumer lighting," said Chief Executive Joep van Beurden in a statement.

Shares in CSR were trading down 2.7% at 567.50 pence Thursday morning.

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Source: Alliance News

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