Wolfson Microelectronics Falls on Samsung Drop-Off: London Mover
Wolfson Microelectronics Plc (WLF) fell 2.5 percent after the Scottish semiconductor-maker said lower-than-expected orders from major customers will hurt sales.
Second-quarter sales growth had slowed because of “lower-than-expected end product sell-through at some key customers,” Chief Executive Officer Mike Hickey said in a statement today. “We expect this to continue to impact revenue over the next few months, as customer inventory is run down.”
Wolfson, based in Edinburgh, signed a deal with Suwon, South-Korea-based Samsung Electronics Co. (005930) in April to supply audio components for its smartphones including the Galaxy S4. Samsung second-quarter earnings then missed analyst estimates and the company predicted that growth in the smartphone market would slow in the next three months.
“Even adjusting for the Samsung slowdown, the numbers came out worse than I’d expected,” Pia Tapley, a London-based analyst at N+1 Singer Ltd, said in a phone interview. Wolfson may have suffered from generating more than 70 percent of its revenue in Europe and Asia “where weakness has been previously flagged in the industry,” N+1 Singer said in a note to investors.
Wolfson said it expected third-quarter revenue to be between $40 million and $50 million. The mid-point of that range would mean a 15 percent decline in sales compared with the same period last year.
“We’re expecting things to pick up towards Christmas,” Hickey said in a conference call today. “Our business is still very seasonal.”
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