CSR 1H08 revenues slip, profit hit by write down; sees good prospects in its ‘Connectivity Centre’
Bluetooth specialist and market leader CSR plc said its revenue for H1 2008 was $349.3m, down 7% on 1H07 while a significant write down saw operating ‘profit' slip into the red to the tune of $24.5m, compared with a profit of $47.0m in H107.
Gross profit for H1 2008 was $157.4m, down 8% from $170.4m in H107, while underlying operating profit was $31.5m, compared with $65.3m.
The write down was a charge of $52.9m, resulting from the decision to discontinue investment in UbiNetics' protocol software development programme following the recommendations of the Cambridge Group's recent operational assessment.
CSR said the Q2 result was in line with guidance given via the stock market.
CEO Joep van Beurden said: "Despite the continuing tough economic environment, CSR has delivered Q2 financial results in-line with expectations, with revenues significantly up over the first quarter and a stable margin. We have also increased the momentum of our development and reinforced our product leadership position.
"We have redeployed our R&D behind the very substantial growth opportunities we see in the emerging Connectivity Centre market, which we believe will alter the profile of our industry in the coming years. 150 of our existing team of developers have been redeployed from baseband related activities to accelerating the development of the Connectivity Centre.
"We have improved the pace of our execution through the re-organization of the R&D function and clear focus on the Connectivity Centre. Ahead of schedule, in June, we launched BlueCore7, our next generation chip that combines Bluetooth with FM Transmit, FM Receive, Bluetooth low energy and GPS RF".
He said that CSR's embedded Wi-Fi product will be shipping in six smart phones by the end of the current quarter. Digital picture frames incorporating CSR's UniFi will be in the shops by this Christmas, and its next generation Wi-Fi chip, 802.11a,b,g,n at 65nm was progressing well.
He said that this year's financial performance will be framed by the economic environment and the current generation of products. He expects that Q3 2008 revenues will be in the range of $190m to $220m.
"Looking ahead, while we expect no alleviation in macro economic pressures, the external evidence increasingly supports our belief that what we define as the Connectivity Centre - combining Bluetooth, FM Radio, embedded Wi-Fi, GPS and a progressively growing range of other short range wireless technologies - is central to the way the market will develop and is set for enormous growth," Mr van Beurden said.
"CSR is the only 'pure play' connectivity company and is moving fast to create and lead this market. This, together with our product leadership and strong customer relationships give us considerable confidence CSR will deliver superior shareholder value over the medium and long term."
The stock market did not seem quite as sanguine. CSR shares were down 3.5% in morning trading.
