May 9, 2018 / 12:24 PM / a year ago

UPDATE 1-Israel chipmaker Ceva Q1 profit falls on weak mobile market

(Explains Ceva reporting using new accounting standard)

TEL AVIV, May 9 (Reuters) - Israeli chip designer Ceva Inc reported on Wednesday lower quarterly profit, weighed down by a drop in royalty revenue due to weakness in the mobile phone market.

Ceva earned 4 cents per diluted share excluding one-time items in the first quarter, compared with 28 cents a share a year earlier. Revenue fell 17 percent to $17.6 million.

Ceva in the quarter began reporting using a new revenue recognition standard known as ASC 606 that affects how the company reports royalties.

According to the previous reporting standard, revenue was $19.5 million and adjusted earnings were 11 cents a share.

The company, a licensor of signal processing platforms and artificial intelligence processors, was forecast to earn 11 cents a share on revenue of $18.7 million, according to Thomson Reuters I/B/E/S.

Ceva said analysts’ estimates were compiled according to the old accounting standard.

Ceva said it signed 14 licensing agreements in the quarter including two customers for its new NeuPro AI processor used in autonomous driving systems.

“In our royalty business, the market experienced excess channel inventory in the low tier smartphone and feature phone markets, which resulted in weaker than expected baseband shipments in the first quarter,” CEO Gideon Wertheizer said. (Reporting by Tova Cohen Editing by Steven Scheer and Toby Chopra)

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