CSR’s Q1 2007 revenue grows but profits down; outlook strong
Global Bluetooth market leaders CSR plc (CSR.L) said its revenues for the quarter ended 30 March were up 19% to $160.1m quarter on quarter.
Gross profit for the quarter was $72.1m compared to $80.4m in Q4 2006, but was up from theQ1 2006 profit of $63.8m.
The Cambridge-based company significantly boosted its R&D investment to $33.2m from $22.4m. The company's design-win momentum remained strong across all applications, with notable wins in Nokia N95, 6300 and Samsung's SGH-U600 handsets.
CEO John Scarisbrick (pictured) said: “CSR has made a good start to the year as we retain and build upon our position as the unequivocal Bluetooth market leader. Net operating cash flow remains very strong, inventory has returned to normal levels and we have increased our rate of investment in research and development to ensure we continue to capitalise on the growing market for wireless applications.
“The outlook for 2007 remains positive. We expect mobile handset attach rates to grow to 40% - 50% this year. The market beyond the mobile phone, which now accounts for over 50% of our revenues, will continue to grow. This, together with our first quarter results and forward bookings to date, places CSR on track to meet its expectations for the full year”.
CSR is expecting revenues of $195 to $220m for Q2 and expects to be on track to meet its expectations for the full year.
The company said that in the mobile phone sector, aside from GSM wins with top tier handset OEMs including Nokia and Samsung, CSR was also selected for four CDMA designs based on Qualcomm's 6000 chipset. Design in activity has also started for CSR's BlueCore-5 FM, the silicon will ship in volume in H2, 2007.
CSR continued to dominate all segments of the Bluetooth headset market, and BlueVOX QFN (a low cost headset solution offering eBOM of less than $6) is now in volume production, with headsets using the technology expected to appear on the shelves in Q2 2007.
In terms of technology developments, CSR BlueCore5-Multimedia, now shipping in volume, still offers the lowest power consumption in the industry, and via a series of partnerships now supports improved noise suppression, echo cancellation, text to speech and many other functions which have been ported to the unique on-chip 24-bit DSP architecture inside BlueCore5-Multimedia. Design activity has been strong for UniVox Mobile, CSR's low power Voice over IP solution for mobile handsets using CSR's single-chip UniFi solution for WiFi.
In the automotive segment, a segment that has seen strong demand following tougher penalties imposed on people who drive while using a mobile phone, CSR continues to win the majority of all designs. In the MP3 market, CSR is now working with the majority of MP3 reference design providers, including PortalPlayer, to stimulate the introduction of Bluetooth into their designs.
The company said that in 2006, the Bluetooth market grew to over half a billion units from around 320 million units in 2005. It expects continued strong development of the Bluetooth market in 2007.
Bluetooth is increasingly being incorporated into applications beyond the traditional cellular segment including PCs, gaming, music and automotive.
The company’s share price was up 17p to 762p. It is now valued at just under £1 billion.
4th May 2007
