Zoran Corp., Santa Clara, Calif. today announced thatrevenue and earnings for its fourth quarter ending December 31, 2000 will be below current forecasts.
Zoran said it attributes the lower-than-anticipated revenues for the fourth quarter to several market factors including the recent slowing of the worldwide economy. Specifically, the company notes that growth in China's domestic DVD market segment, which has been the company focus in China until recently, has been much slower than anticipated.
"The company has also experienced a manufacturing delay related to its recently announced DVD companion CPU chip....This delay has adversely affected the company's sales this quarter into the worldwide DVD markets including the China export market, which unlike the China domestic market, has been very robust during 2000. The result of this delay was that several million dollars of revenue has been pushed out of fourth quarter. In addition, there continue to be production ramp issues associated with the company's Taiwan-based digital camera customers.
"While the company was beginning to see some improvement regarding these production issues, it has recently learned that its customers have not solved all of the issues necessary to increase their production ramp, which has further delayed new shipments and revenue growth from this product family. Finally, as a result of the recent softness in the PC market, the company experienced a significant push-out of audio chip orders destined for the digital speaker market," Zoran added.
Revenue for the fourth quarter is now expected to be in the range of $18 million to $22 million. "At this time there is still uncertainty regarding the final revenue make-up for the fourth quarter, which could significantly impact the gross margins. As a result the company currently believes that its bottom line results could range from pro forma per share earnings of 5 cents on the high end to breakeven," the company said.
While the company said it remains optimistic about the growth in its core markets, it anticipates some sluggishness at the beginning of 2001. The company currently anticipates revenues for the first quarter to be in the range of $20 to $24 million. It expects that product gross margins will recover to levels of between 40% and 45%. The company said it continues to believe that it will achieve record year-over-year revenue growth for the year ending December 31, 2001, currently expected to be approximately 80 to 100 percent.