The sound coming from SRS Labs Inc.’s earnings announcement wasn’t too sweet.
Shares of SRS, which released its fourth-quarter earnings results Thursday afternoon, were down more than 9% to $4.3 in after-hours trading. Weakness in its chip unit was to blame.
SRS licenses audio and voice technology that improves the sound of home sound systems, DVD players, car radios, computers and other electronics gear. It also makes chips for the audio markets.
It’s the company’s Hong Kong-based chip unit, known as Valence Semiconductor Ltd., that knocked sales in the fourth quarter.
SRS said overall sales fell 24% in the fourth quarter to $4.5 million. Operating income fell 36% to $305,900.
“Our fourth quarter results were affected by softness in our semiconductor business and staff changes,” said Thomas C.K. Yuen, chairman and chief executive of SRS.
The company’s licensing sales rose 9% in the quarter, not enough to offset the 51% decline in sales from Valence.
Yuen expects some more bumps before the semiconductor business improves.
“We expect that our semiconductor business will experience residual weakness in the first quarter, but will improve as the year unfolds and the actions we have taken to refocus and further define our strategy begin to pay off.”
He said the company was moving to put together a “significantly stronger” sales staff.
