Cambridge wireless technology business CSR paid the price for a period of transition as its stock nosedived on early trading in the UK following a 24 per cent fall in Q1 revenues.
CEO Joep van Beurden explained that CSR had transitioned from legacy products to lucrative vertical markets in next generation technology – but it couldn’t stop the share price falling more than six per cent and 40p to 601.50.
Dollar revenue was $180.8 million – 24 per cent lower than the $237.9m achieved in Q1 of 2013 – mainly reflecting a 57 per cent decline in legacy revenue.
CSR dipped from a $7.7m operating profit this time last year to an IFRS operating loss of $3.3m.
Fortunately CSR is cash rich and ended the quarter with $302.1m in its war chest.
Van Beurden said the dip had been well flagged up. “As expected, year-on-year revenue fell reflecting a decline in legacy revenue, while core year-on-year revenue was down – mainly as a result of the strong first quarter in 2013 where we saw non-recurring revenue in China.
“During the first quarter we continued our successful migration towards a more profitable platform business which we believe provides strong growth opportunities.
“Encouragingly, our underlying gross margin reached a record of 55.7 per cent and we are making good progress in our core businesses of Voice & Music, Auto factory-fit and Bluetooth Smart.
“We continue to focus on the newer and higher margin products within our Core business. In Auto, we are progressing well with our projects for automotive factory-fit infotainment platform SoCs.
“Alps will be integrating CSR's aptX® codec in its automotive connectivity modules and we are starting to see the implementation of Bluetooth® Smart in automobiles. In our Voice & Music business, we continue to see good growth opportunities, especially in the area of stereo headsets, soundbars and speaker docks.
“We are experiencing strong design win traction in Bluetooth Smart. We are seeing a high level of interest in CSRmesh™ from a wide range of manufacturers and I am especially pleased that CSRmesh will be deployed by two Tier One manufacturers of smart lightbulbs.”
CSR expects second quarter revenue to be in the range of $190m to $210m.