UK tech firm IQE’s shares plunge after second revenue warning
Shares in UK technology company IQE have plunged over 20 per cent after the firm issued its second revenue warning in five months.
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IQE, which makes parts for chips used in products made by Apple and various Asian manufacturers, said it had “experienced very challenging market conditions in 2019”.
The raging US-China trade war has dented global trade and business confidence. It has hit firms with connections to both countries especially hard.
IQE now expects revenue this year of £136-£142m, down from previous estimates of £140-£160m. Its revenue was 156.3 million pounds in 2018.
The warning dragged shares down 23.4 per cent by 10am to 50.45p.
It is the second revenue warning IQE has sounded in recent months. The Welsh company said in June that it would miss its 2019 revenue forecast due to a hit from US restrictions on Chinese tech giant Huawei.
Today, IQE chief executive Drew Nelson said in a statement that the shortfalls in revenue “relate predominantly to two major customers”. He did not name the customers, however.
Analysts at broker Peel Hunt said they now expected IQE to post a loss of £5.3m this year.
Nelson said that IQE “remains well positioned to capitalise on an expanding future compound semiconductor market opportunity driven by the macro trends of 5G and connected devices”.
He said the technology firm was dedicated to “increasing profitability, with specific responsibilities assigned for programs on operational execution, new technology introduction, revenue expansion through customer proximity and diversification, and strong cost management”.
As part of this cost management, IQE now expects capital expenditure in 2019 to be towards the lower end of its previous guidance of £30-£40m.
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IQE said next year is likely to start with a weak first quarter, but said it was “cautiously optimistic” beyond that.
(Image credit: IQE)