Dialog Semiconductor Gains on Strong Apple IPhone Sales

Dialog Semiconductor Plc rose to a two-month high after Apple Inc., the German company’s biggest customer, reported second-quarter revenue and iPhone sales that beat analysts’ estimates.

Dialog Semiconductor increased as much as 7.3 percent to 12.64 euros, the highest intraday price since May 22.

Apple reported revenue of $35.3 billion, exceeding analyst estimates of $35 billion. The Cupertino, California-based company sold 31.2 million units of the iPhone, its best-selling and most profitable product. Analysts had estimated 26.1 million units on average.

“IPhone sales were especially strong, which is important for Dialog,” Thomas Becker, a Frankfurt-based analyst at Commerzbank AG, said by phone. “Apple did not disappoint.”

Dialog traded 6.2 percent higher at 1:42 p.m. in Frankfurt, valuing the company at 852 million euros ($1.1 billion). Volume was 5 percent more than the three-month daily average.

The Kirchheim, Germany-based company reported second-quarter revenue of $151.7 million yesterday, beating estimates of $150.7 million. Dialog also forecast third-quarter revenue of $190 million to $210 million excluding its iWatt unit.

The semiconductor maker gave “better-than-expected” sales guidance for the third quarter, Chetan Udeshi, a London-based analyst at JP Morgan Chase & Co., said in a note today. The company appears to be supplying more semiconductors than previously expected for new Apple devices to be released later this year, the analyst said.

Dialog’s shares rose as much as 12 percent yesterday, the biggest intraday gain in 1 1/2 years.

“There remains a risk to Dialog’s sales in the fourth quarter of 2013 and beyond if the sell-through of the new Apple devices does not improve post the launch,” Udeshi said, remaining neutral on Dialog with a target price of 12 euros.

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