Shares in ParthusCeva, the Dublin-based technology firm, slumped 15 per cent yesterday following a warning that its fourth- quarter sales were significantly below most analysts' forecasts.
The firm, which was formed last year from the merger of Parthus and the Ceva division of US-based DSP Group, also said that it would report a net loss of up to $25.2 million (€24.06 million) for the quarter.
ParthusCeva said it expects revenue to be between $5 million to $5.6 million for the fourth quarter ended December 31st, 2002, significantly below pre-merger forecasts for revenues at the company.
ParthusCeva chief executive Mr Kevin Fielding said the persistent downturn and challenging market conditions in the semiconductor industry had affected sales during the fourth quarter. "We have experienced delays in licensing decisions on several significant deals, although our overall sales pipeline has not materially diminished," Mr Fielding said in a statement yesterday.
Based on ParthusCeva's new forecast, the firm said it expected to report a net loss of $24.7 million to $25.2 million for the fourth quarter. This net loss includes a one-time restructuring charge of up to $6.8 million; a one-time, non-cash charge of $15.8 million relating to a write off of in-process research which failed to produce results following the merger of Parthus and Ceva; and a $500,000 charge on foreign exchange losses.
ParthusCeva said it expects to report a pro forma net loss of $2.3 million to $2.8 million, excluding the one-time charges relating to restructuring and in-process research. It also said the merger of Parthus and Ceva was accounted for as the acquisition of Parthus by ParthusCeva, and, accordingly, the preliminary results only included the results of the Parthus business for the last two months of the fourth quarter.
Mr Sean Murphy, a semiconductor analyst with Nomura Securities, said the new revenue forecasts by the firm were at least a third below market expectations. He said ParthusCeva would face challenges in 2003 as it sought to engineer a new product set which combined Ceva's digital signal processing technologies with Parthus' computer chip products.
The profit warning hit shares in ParthusCeva which fell by more than 15 per cent on the Nasdaq and London stock exchanges. But the stock later recovered slightly to close down 45.5 pence sterling at 296 pence, a fall of 13 per cent.
