CSR bullish on raising market share

Shares in CSR rose more than 9 per cent on Thursday after the maker of wireless chips reported third-quarter revenue at the upper end of estimates and said it was confident of increasing its share in the mobile phone market.

The Cambridge-based company, which supplies chips to Nokia and other mobile handset makers, said customers remained cautious about macroeconomic trends.

It said many consumer electronics clients, for example, were now ordering only two rather than three months ahead, as they remained tentative about consumer appetite in the run-up to Christmas.

However, CSR said it was seeing a rebound in sales of its chips to handset makers. While handset shipments are still expected to be lower than last year, the company now expects a decline of just 7 per cent, compared with an estimate of 9 per cent at the beginning of the year.

Earlier this week Arm, the semiconductor design company, also sounded a positive note, largely on the back of strong growth in the sale of smartphones.

CSR itself was taking a larger share of the market, said Joep van Beurden, chief executive.

“The underlying business is looking very strong, with design wins gaining momentum,” he said. Earlier this year, CSR regained Nokia as a key customer for its Bluetooth wireless chips.

Mr van Beurden said he expected the market for chips providing wireless connectivity, such as Bluetooth, wi-fi, FM radio and GPS, to grow from about $3.2bn in 2009 to between $5bn and $7bn (£4.2m) in 2012, giving CSR good expansion prospects.

Shares in CSR, which have trebled in value over the past year, closed up 38p at 440p.

CSR, which bought Sirf, a maker of GPS chips, in June, reported revenue of $210m for the three months to the end of September, up 2 per cent year-on-year. Sirf contributed $59.5m of sales.

Mr Van Beurden is expecting fourth-quarter revenue to be $180m-$200m, in line with market expectations.

Pre-tax profits for the quarter were $10.7m, compared with $30.8m a year ago. The decrease partly reflected costs associated with the Sirf acquisition. Earnings per share were 5 cents, compared with losses of 22 cents in the second quarter, and earnings of 18 cents in the same quarter last year.