Slowdown in handset sales sends CSR shares tumbling

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The Independent Online

CSR, the wireless technology group, warned yesterday that revenues in the first three months of 2005 are likely to drop by as much as a quarter as a result of a post-Christmas lull in orders from mobile phone manufacturers.

CSR, the wireless technology group, warned yesterday that revenues in the first three months of 2005 are likely to drop by as much as a quarter as a result of a post-Christmas lull in orders from mobile phone manufacturers.

The news sent shares in CSR, which provides chips to electronic goods manufacturers, down as much as 19 per cent, before they closed 15 per cent lower at 333p.

After a rush of demand for mobile phones in the run-up to Christmas, CSR said orders have now fallen off. Its customers, companies such as Nokia and Samsung, are also saddled with excess stock, which is creating a lag in new orders. CSR now expects to post revenue of between $60m and $70m for the first three months of 2005, down from $80m in the last quarter of 2004 and down more than 10 per cent on City forecasts for the period.

John Hodgson, the chief executive of CSR, said: "There has been a slowdown in the rate of growth because of the change in seasonal sales of [mobile] handsets."The company is still on track, however, to perform well over 2005 as a whole.

CSR, which floated in February last year, is one of the leaders in Bluetooth technology, a radio link that can hook up head sets to phones and computers. Contract wins for its technology had increased to 114 in the three months to the end of December, a record rate of increase for CSR. These included 14 mobile phone design wins, with manufacturers such as Nokia, Samsung and Motorola, and 33 headset design wins.

Mr Hodgson said the growing use of Bluetooth technology in mobile phones would continue to boost sales at the company.

CSR reported pre-tax profits of $19.2m (£10.2m) in the last three months of 2004, up 5 per cent on the previous quarter. Pre-tax profits for the year came in at $59.3m, compared with a loss in 2003 of $1.6m, as revenue soared by 274 per cent to $253.1m.

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