Weak Electronics Market Hurts DTS

DTS Inc. missed Wall Street expectations for earnings and revenue in the third quarter as the consumer electronics market softened. The Calabasas audio technology company on Monday reported a net loss of $2.8 million (-16 cents a share) in the quarter ended Sept. 30, compared with net income of $3.9 million (22 cents) in the same period a year earlier. Revenue decreased 14 percent to $30.7 million. Analysts on average expected net income of 43 cents a share on revenue of $35.7 million, according to Thomson Financial Network. Taking into account one-time events, DTS reported adjusted net income of $5.7 million (32 cents) for the third quarter, compared with net income of $6.7 million (39 cents) in the same period a year ago. Chief Executive Jon Kirchner conceded that financial performance was disappointing, which he attributed to a softening market and slower than expected release of new products using DTS technology. “Despite these short-term headwinds, we are making solid progress in strengthening multiple DTS ecosystems across mobile, wireless audio, cinema and auto,” Kirchner said in a prepared statement. During the quarter, DTS acquired iBiquity Digital Corp., a Columbia, Md. developer of high-definition radio technology, in a deal valued at $172 million. That acquisition will contribute meaningful growth in revenues, profits and cash flow for the coming year, Kirchner said. Shares closed down 51 cents, or less than 2 percent, to $30.49 on the Nasdaq.