Creative Technology swings to fiscal 4Q net profit, issues positive outlook on SXFI

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Creative Technology reported on Friday a fiscal fourth quarter net profit of US$25.57 million, swinging from a year-earlier loss of US$5.56 million amid gains from litigation settlements.

Sales for the quarter ended 30 June fell 3 percent on-year to US$14.09 million, it said in a filing to SGX after the market close on Friday.

Total expenses fell 12 percent on-year in the quarter to US$9.68 million due to higher legal expenses in the year-earlier period, while other gains rose to US$30.67 million from US$874,000 in the year-earlier quarter, mainly on US$32.6 million in gains from litigation settlements, offset partially by foreign exchange loss of US$1.9 million, Creative Technology said.

The foreign exchange loss was due to the U.S. dollar strengthening against the Singapore dollar, euro, British pound and Japanese yen, it said.

For the full fiscal year, Creative Technology reported a net profit of US$40.41 million, swinging from a year-earlier loss of US$22.87 million, while revenue fell 5 percent on-year to US$66.07 million.

In its outlook, while it said it expected the overall market for its products would remain challenging, it was positive of its recent announcement of its Super X-Fi, or SXFI, headphone holography technology.

“Sales of new SXFI products is expected to provide good revenue growth opportunities for the current financial year,” Creative Technology said. “SXFI was announced in the third quarter of fiscal 2018 and has received overwhelming reception. We expect to commence volume shipment of the new SXFI products from the next quarter (the second quarter of fiscal 2019).”

However, Creative added that for the current quarter, it expected to report an operating loss.

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