Gemalto Forecasts Growth as It Drafts Strategy Around Mobile
Gemalto NV (GTO), the maker of security chips and software that’s scheduled to unveil a new strategy on Sept. 5, forecast operating profit and sales will rise at least 10 percent in 2013 for a second year.
First-half adjusted operating profit gained 14 percent to 131 million euros ($174 million), the Amsterdam-based company said late yesterday in a statement. Sales gained 11 percent to 1.13 billion euros, in line with analysts’ predictions. The stock rose as much as 6.4 percent to a record.
“We’re benefiting from deep durable trends because of new technologies in segments like mobile and machine-to-machine,” Chief Executive Officer Olivier Piou said during on a conference call today. “I don’t see that rupturing in 2014.”
Gemalto, which invented the smart chip used in bank cards and mobile phones, will address investors next week to outline plans for business in coming years. Its 55-year-old chief has shifted Gemalto from commoditized hardware to more lucrative packages including security software.
Piou so far has bet on a ramp-up of mobile payments and machine-to-machine transmissions, as well as new opportunities in security with companies such as Facebook Inc. (FB) He has said the next phase of development will be to expand existing operations.
Gemalto rose 4.6 percent to 87.66 euros at 9:40 a.m. in Amsterdam after reaching 89.16 euros, the highest price since the company was created in the 2006 merger of Gemplus International SA and Axalto Holding NV.
Analysts have predicted a full-year 10 percent revenue increase. Profit from ongoing operations advanced 26 percent last year, while sales had gained 13 percent.
“Sales growth this year should be on the same kind of trend as last year,” Piou said during the call. “There’s less visibility on profits because of seasonality, but we’re definitely on the right trend and we’re confident.”
The CEO has cited mobile money and mobile identification as probable growth areas as part of his strategic plan.
Payments through mobile devices are set to increase as more people transfer money and shop using their smartphones. Industrywide transactions will rise to $721 billion by 2017 from $235 billion this year, according to researcher Gartner Inc. Smartphones are the biggest and fastest-growing part of the mobile-phone market.
To contact the reporter on this story: Marie Mawad in Paris at email@example.com