Dialog weathers iPhone slump to hit its revenue target
Chip designer Dialog Semiconductor said on Monday that it managed to hit its fourth-quarter revenue guidance despite a slump in iPhone sales at its main customer, Apple.
Shares in the Anglo-German company jumped 4% in Frankfurt as investors credited its resilience at a time when other Apple suppliers have slashed or missed their targets.
The shares had fallen in early trade after Dialog said unaudited preliminary sales came in at $431m in the fourth quarter, the low end of a guidance range of $430m-$470m, but they rebounded on the broader view that Dialog had weathered Apple’s recent sales slowdown.
“Dialog was one of the few Apple suppliers not to warn, stating at the time their comfort with the guidance provided,” said Barclays analysts in a note.
About 75% of Dialog’s business is supplying power management chips to Apple, which warned in November of slow year end sales and on January 3 issued its first sales warning in 12 years, blaming weaker iPhone sales in China. Shares in suppliers have been hit as a result, with many forced to revise their guidance lower. Dialog, however, stood by its fourth-quarter revenue forecast and managed just to meet it.
CEO Jalal Bagherli said in November that Dialog was seeing less of an impact than other suppliers because its power management chips were used across a broad range of Apple devices and not just in iPhones.
Dialog struck a $600m deal last October to transfer people and patents to Apple as part of a push to diversify its business.
The company says that the deal will buy it time to expand into areas such as the internet of things.
Revenue in 2018 is not expected to be hit. Dialog will publish audited results for 2018 on March 6.