Wolfson slumps amid weak demand
Chip supplier Wolfson Microelectronics lost a third of its market value today after pre-Christmas demand for some products failed to meet expectations.
The group, which includes Hewlett-Packard and Apple among its customers, said orders for parts used in products such as DVD players had disappointed and that the uptake on multimedia mobile phones had been slower than hoped.
Shares in the Edinburgh-based group, which listed on the London stock market last year, fell 36% to 104.75p – wiping £64.3m (€93.2m) off its value.
The slump came after Wolfson said it expected second half revenues to be in the range of $56m (€55.2m) to $60m (€48.5m). This would still result in full-year growth of more than 50%, it added.
Chief executive David Milne told the City that the business remained in good shape, despite the slowdown in some of its end markets.
He added: “We are revising our guidance for the second half because of a lack of the typical pre-Christmas surge in demand for some of our products.
“Although this is extremely disappointing, Wolfson will still deliver substantial growth in 2004.”
The company did not pinpoint weaker consumer demand for the warning and said a build-up in inventories had caused many manufacturers to cancel orders. Wolfson said other parts of its business had performed well, with particularly strong growth in sales of portable products.
Wolfson has manufacturing partners around the world and sells its products through direct sales offices and a network of agents and distributors.
