AMS AG (AMS), the Austrian maker of semiconductors whose clients include Apple Inc. (AAPL), lost as much as a fifth of its market value after saying operating profit will probably fall this year as clients delay orders.
AMS shares fell as much as 23 percent, the biggest intraday decline since Aug. 9, 2011. The stock more than doubled last year. The shares were trading 22 percent lower at 67.50 francs as of 11:37 a.m. in Zurich, giving the company a market value of 978 million Swiss francs ($1 billion).
AMS forecast operating profit will decline this year because some “ramp-ups” for devices with its products will occur in late 2013 or the first months of next year, the Unterpremstaetten, Austria-based company said in a statement on its website today. AMS didn’t say which client delayed orders, saying some of the contracts are for new products with higher margins. The outlook raised concern Apple may be delaying the introduction of a new iPhone, weighing on shares of suppliers to the Cupertino, California-based company.
“AMS’s warning could be the first hint that the launch of Apple’s new iPhones will be postponed further into late third-quarter or even fourth-quarter 2013, which would have a severe adverse impact on the entire supply chain,” wrote Bernd Laux, an analyst at Kepler Cheuvreux. “However, AMS’s comments could also be a ‘catch-up’ relative to competitors’ expectations, which had already been lowered in April.”
Dialog Semiconductor Plc (DLG), a Kirchheim, Germany-based maker of chips for iPhones, fell 3.5 percent to 11.25 euros in Frankfurt. Laux, who has a buy recommendation on the stock, said AMS’s statement may “drag on the sentiment” for chip stocks and suppliers of Apple, though the Austrian company has particular issues, such as a change in management, that don’t affect the entire industry.
AMS said on April 22 it expected full-year revenue growth to exceed 10 percent. Today it said sales will probably rise this year.
“While we were aware that AMS’s guidance was potentially at risk and depending on customers, today’s announcement is somewhat conflicting with earlier information and therefore raises questions again regarding management and board and communication,” wrote Michael Foeth, an analyst at Bank Vontobel. Analysts may cut their 2013 operating profit estimates as much as 20 percent, he said. “Rebuilding confidence may now become a longer exercise.”
More than 550,000 shares exchanged hands, more than three times the daily trading average for the last three months.
To contact the reporter on this story: Thomas Mulier in Geneva at firstname.lastname@example.org