CSR blames profit fall on Zoran acquisition

CSR, the British chipmaker, cited “cautious order patterns” as it reported a third-quarter operating loss of $7.7m, attributing a large part of the loss to its acquisition of Zoran, its US peer.

The company, which makes chips for mobile phones and sat nav devices, said that it expected the deal to create cross-selling opportunities in the coming months.

Group revenues rose 9.5 per cent from the same quarter last year to $243m. This included turnover of $34.1m from Zoran.

Shares in the company initially rallied before closing down 2 per cent at 179.7p.

“My take on it is that people were fearing that Q4 ’11 guidance could be very bad, while it was cautious it wasn’t terrible,” said Eoin Lambe, analyst at Liberum Capital.

The shares have fallen 56 per cent from a 2011 peak of 450p, reached just before the bid for Zoran was announced in February this year.

The company completed the $484m acquisition in August after lowering its offer price following a sales warning from Zoran.

Mr Lambe said while the results were disappointing, “given that Zoran is losing a huge amount of money,” the company nevertheless reported an underlying profit of $24m.

The company gave further indication that its combination Bluetooth and WiFi chip – used in smartphones – would be gaining revenue by the third and fourth quarter of next year. Analysts have high hopes for the chip, because the company’s products have not been used in smartphones to date.

Diluted earnings per share fell 12 cents to three cents per share.

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