JERUSALEM (Reuters) - Israeli chip designer Ceva Inc on Wednesday reported a drop in fourth-quarter profit that missed estimates but the company forecast a slight increase in sales for this year.
Ceva reported earnings of 23 cents per diluted share in the fourth quarter excluding one-time items, compared with 25 cents a year earlier. Revenue fell 1 percent to $21.4 million.
The company, which licenses signal processing platforms and artificial intelligence processors, was forecast to earn 26 cents a share on revenue of $22.1 million, according to I/B/E/S data from Refinitiv.
For 2019, Ceva expects revenue of $80 million, up from $78 million last year but well below analyst forecasts for $88.3 million.
Ceva’s shares were down about 3.3 percent in early trading on Nasdaq.
Ceva signed 13 licensing agreements in the quarter, including one with a company targeting the 5G mobile market that was one of the largest signed in Ceva’s history.
“Our fourth quarter royalties came in lower than expected, reflecting softness at a large smartphone OEM (original equipment manufacturer), primarily due to the slowing economy in China and lower overall demand for entry-level phones in emerging markets,” CEO Gideon Wertheizer said.
Licensing and related revenue was up 17 percent in the quarter to $10.5 million, while royalty revenue dropped 14 percent to $10.9 million.
The company said it bought back $3 million in stock in the fourth quarter, bringing its total stock repurchase for 2018 to $20 million.
Reporting by Ari Rabinovitch; Editing by Steven Scheer and Jane Merriman