Wolfson sees shares plunge after warning
WOLFSON Microelectronics, the Scottish chipmaker, yesterday scaled back its forecast for 2011 after its customers delayed the launch of new gadgets and sold fewer-than-expected smartphones and tablets.
The warning sent shares in the Edinburgh-based company plummeting. They closed down 26 per cent at 175p, making it the biggest faller in the FTSE indices.
The downgrade is a setback to Wolfson’s recovery from the blow of losing contracts with Apple in recent years.
The firm had been gathering momentum as it won deals to supply chips for high-end smartphones made by Samsung and LG .
“As a result of lower customer end product sell through and delays in some key customers’ new product introductions… Wolfson is moderating growth expectations for 2011,” it said.
Peel Hunt analyst Alex Jarvis said Wolfson’s full-year growth expectations of 10 to 20 per cent, against consensus of 26 per cent, would have a “significant impact on FY11 profits”, and he cut his earnings per share (EPS) forecast by 54 per cent.
Seymour Pierce also reduced it full-year adjusted EPS forecast — to 1.4 cents from 10.4 cents — and downgraded the company to a “sell” rating.
Wolfson said revenue for the second quarter would be between $37m and $39m (£23.2m and £24.4m), at the lower end of its previous guidance of $37m to $45m.