DSP reports lower Q4 on legacy ops, but sees new initiatives coming into their own this year

DSP Group reported lower results for its fourth quarter, pulled down by the long-term decline of its cordless business. CEO Ofer Elyakim noted however that the company, which has been investing for years in new product initiatives, had reached an inflection point and that it was well positioned for significant long term revenue growth and margin expansion. Elyakim said that in particular that growth at unified communications, voice user interface and IoT is expected to outpace losses at the legacy cordless telephone business in 2018 and to drive dynamic revenue growth and margin expansion thereafter. DSP guided earlier for a sequentially lower Q4, on the seasonally weak demand for VoIP and cordless phones that use the company’s components. 

Revenues fell 11 percent in Q4 from the year before to USD 31.2 million, while the net result went to a loss of USD 0.1 million or USD 0.01 per share from a profit of 1.3 million or 0.06 per share. However, the gross margin reached 47.8 percent, an improvement of 270 base points. Revenues rose 48 percent year-on-year at Office/VoIP and 1 percent at Home Gateway. At SmartVoice and IoT, they fell 20 percent and 54 percent, respectively. 

For the full year, revenues fell 10 percent to USD 124.8 million and the net result went to a loss of USD 3.0 million or a loss per share of USD 0.14, from a gain of 4.8 million or 0.21 per share. The gross amounted to USD 46.2 percent, an improvement of 210 base points.