August 7, 2018 / 12:11 PM / 2 months ago

UPDATE 1-Israeli chipmaker Ceva Q2 profit, revenue drops

(Adds details on share buyback)

JERUSALEM, Aug 7 (Reuters) - Israeli chip designer Ceva Inc reported on Tuesday lower quarterly profit that missed estimates, weighed down by a drop in royalty revenue due to weakness with a large Chinese handset customer.

Ceva earned 4 cents per diluted share excluding one-time items in the second quarter, compared with 28 cents a share a year earlier. Revenue fell 15 percent to $17.5 million.

The company, a licensor of signal processing platforms and artificial intelligence processors, was forecast to earn 11 cents a share on revenue of $19 million, according to Thomson Reuters I/B/E/S.

Ceva said it signed nine licensing agreements in the quarter.

The company said it purchased 270,000 of its own shares in the second quarter for $9 million. Its board approved an expansion of the buyback program and from June 30 it can buy back an additional 700,000 shares.

“Our second quarter royalty revenue came in below expectations due to continued unexpected weakness with one of our large Chinese handset baseband customers,” CEO Gideon Wertheizer said.

“We now expect the weakness with this Chinese customer to continue for the rest of the year and have reduced our annual royalty expectations accordingly.”

The company said it was lowering 2018 annual royalty guidance to a level representing a 10 percent decrease from 2017 royalty revenue, and that it now projects total annual revenue to be about $80 million. (Reporting by Ari Rabinovitch Editing by Keith Weir and Kirsten Donovan)

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