Surprise swing to 4G phones hits Wolfson as losses widen
editor:
0131-620 8462 Chip designer Wolfson Microelectronics unveiled a further fall in revenues yesterday and warned that an expected turnaround driven by new technology will not happen for another six months.
The Edinburgh-based firm, which is famous for its audio chips, admitted it was caught by surprise last year by the faster-than-expected transition to 4G smartphones, also known as “LTE”, which benefited a competitor.
Sales figures were also hit by a collapse in orders from the firm’s second biggest customer, believed to have been Canadian phone maker BlackBerry.
Shares fell 3.9 per cent to close at 125p, but had been as low as 109p earlier in the day. Analysts, however, remained positive on the company’s prospects.
Revenues for the final quarter of 2013 came in at $42m (£26m), down from $56.1m a year before. Gross margins were slightly lower, at 42.2 per cent, pushing the firm to an operating loss of $8.5m, compared to a slim $500,000 profit in the final three months of 2012.
Full-year revenue was flat at $179.4m, with operating losses more than doubling to $20.3m.
The weak figures had been expected after the firm warned of a slowdown three months ago, but investors were disappointed by an outlook statement indicating that the first half of the current year will also be tough as customers are still holding too many of Wolfson’s chips.
The group said revenue growth is still expected this year, but it will be “heavily weighted to the second half” as customers launch products featuring its new “audio hubs”.
it also expects to benefit as