CSR sales hit sends shares plunging

By Andras Gergely

LONDON (Reuters) - Bluetooth specialist CSR (CSR.L) disappointed investors on Thursday with a weaker second-quarter sales forecast and said a weak economy was hurting its sales, taking more than 27 percent off its shares.

CSR, which makes chips and devices using wireless-link bluetooth, said sales would be around $175-$200 (88-101 million pounds) in the second quarter, well below analysts' previous forecast for $211 million, according to Reuters Estimates.

"Looking at second quarter guidance, it looks as if year on year growth is unlikely," said Landsbanki analyst Dan Ridsdale, who cut his recommendation for the stock to "Hold" from "Buy".

The group also said revenue in the first quarter had been in line with expectations at $160.9 million, $800,000 higher than a year earlier.

Shares in CSR were down 25 percent at 296-1/4 pence by 9:29 a.m., having sunk as low as 286-1/2p.

CSR said it expected the wireless connectivity market to grow rapidly over the long term due to increasing demand for smart phones, but it said caution was needed because of the impact of a weaker economy on its business.

"Macroeconomic issues are affecting demand for our customers' end products," Chief Executive Joep van Beurden said in a statement.

"The economic climate and its impact on consumer sentiment is continuing to lead our customers to lower their inventory levels and shorten order times, particularly in the consumer electronics and headset segments. This reinforces the caution we have already expressed for 2008."