Wolfson Microelectronics Plunges to 15-Month Low on Outlook
Wolfson Microelectronics Plc (WLF) fell to its lowest since April last year in London trading after the U.K. semiconductor maker forecast second-half revenue will be “flat” compared with a year earlier as consumer demand slows.
Second-quarter sales increased 7.2 percent to $38.6 million from a year earlier, compared with a rise of 44 percent in the forecast, the Edinburgh-based maker of audio chips for smartphones, televisions and tablet computers, said in a statement today. The company lowered its 2011 revenue growth forecast to less than 10 percent.
“Our customers are being very cautious and waiting to see how things pan out,” Chief Executive Officer Mike Hickey said on a conference call. “Unless there is some weird stalling of consumer demand, we should return to growth next year.”
Revenue growth among U.S. semiconductor makers in the Standard & Poor’s 500 Index is estimated to fall to 6.1 percent in 2012 from 17 percent this year, Bloomberg data show. The smartphone market may grow 55 percent this year after expanding 87 percent in 2010, according to market researcher IDC.
Wolfson’s shares slumped 11 percent, or 18.5 pence, the biggest drop since June 27 when it issued its first revenue growth warning, to 155 pence. The shares plunged 47 percent so far this year, cutting the company’s market value to about 180 million pounds ($293 million).
The revenue forecast compared with one for 10 percent to 20 percent growth four weeks ago.
Wolfson expects revenue growth to resume next year as its audio chips are disintegrated from the core chips used in smartphones and other consumer products, Hickey said.
“Looking to the longer term, Wolfson is a much stronger company than it was in the last industry down-cycle,” Citigroup Inc. analyst Timothy Shaw, who has a “buy” rating on the stock, said in a note to clients today. “Growth in 2012 still carries uncertainty and fears of further downgrades to 2012 consensus may weigh on Wolfson in the short term.”
Wolfson’s second-quarter loss narrowed to $2.6 million, or 1.8 cents a share, from $2.8 million, or 0.8 cent, a year earlier, the company said in the statement.
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