DSP Group (DSPG) shares are sinking this morning after the wireless chipset company warned that full-year revenues will fall short of Street estimates.
The company now sees revenues for the year of $222 million to $226 million, well below the Street at $239 million.
For Q3, the company posted revenue of $65.2 million and non-GAAP profits of 27 cents a share; the Street has been projecting $65.3 million and 20 cents.
“Following a capacity shortage during the first nine months of this year, many customers were prompted to procure materials earlier in order to secure capacity,” CEO Ofer Elyakim said in a statement. “Now with capacity stabilizing, we are seeing a depletion of this safety stock inventory, which according to our checks, should be mostly exhausted during the fourth quarter. As a result of that inventory buildup, our customers’ projections for the fourth quarter have decreased.”
DSPG is down 52 cents, or 6.9%, to $6.99.
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