CSR, the chipmaker whose customers include Apple, Samsung and Sony, has reported a fourth quarter loss, but the company softened the blow by raising its dividend and announcing a $50m share buyback.
The company - which makes GPS, bluetooth and wi-fi chips - went $4.9m into the red in the final three months, helping push full year profits down from $77.4m to $36.8m. Revenues for the quarter, however, were at the top end of expectations at $244m, and a main reason for the profit decline was a decision made in December to cease investment in digital television chips and tuners, following its acquisition of Zoran in August. The company expects to make savings of around $130m a year by the second quarter of the current year.
With a hike in the dividend and the buyback showing its confidence in the future - it also has $278m of cash in the bank - CSR's shares have surged 50.5p to 278.2p, a 22% jump. Analyst Ian Robertson at Seymour Pierce said:
The announcement of the $50m share buy back is good to see as is the news that SiRFstarIV (GPS chip) has been adopted for the Google Nexus.
Guidance for the first quarter is for revenues in the range $205m to $225m. Our current full year forecast is for revenues of $1,082m. First quarter revenues are typically in the low 20s% of full year revenues suggesting that our figure is a percent or two optimistic against this but that the general consensus is in line. The buy case remains firmly intact – an enterprise value/sales ratio of 0.6 times for 2011 is simply too low when compared with almost all of the semiconductor industry.
