(Adds Q4 outlook)
TEL AVIV, Nov 8 (Reuters) - Israeli chip designer Ceva Inc reported on Thursday a smaller-than-expected drop in quarterly profit, as royalty revenue recovered in the wake of new smartphone deployment.
Ceva earned 23 cents per diluted share excluding one-time items in the third quarter, compared with 36 cents a year earlier. Revenue fell 11 percent to $21.4 million.
The company, a licensor of signal processing platforms and artificial intelligence processors, was forecast to earn 20 cents a share on revenue of $21.4 million, according to I/B/E/S data from Refinitiv.
For the fourth quarter Ceva expects to return to growth, forecasting adjusted EPS of 27 cents, up from 25 cents a year earlier and in line with analysts’ forecasts. Royalties in the quarter are expected to match or slightly exceed the third quarter’s level.
Ceva signed 13 licensing agreements in the third quarter, including nine in China. Customers’ target markets for the licenses include advanced driver-assistance systems, consumer and industrial Internet of Things and wireless audio.
“We saw a strong recovery in the third quarter in shipments from our customers, including a record 98 million non-handset baseband units, of which 83 million were Bluetooth devices,” Chief Financial Officer Yaniv Arieli said. (Reporting by Tova Cohen Editing by Steven Scheer)