(Reuters) – IQE, whose semiconductor products are used in Apple Inc’s iPhones, forecast full-year core earnings and revenue below analysts’ estimates, making it the latest semiconductor company to be hit by a weakness in the tech sector, sending its shares down 13 percent.
Cardiff-based IQE said it expects to report revenue of not less than 156 million pounds for the full year ended Dec. 31 on adjusted core earnings of 27.5 million pounds amid a global slowdown in the tech sector.
The company had already forecast a 16.4 percent decline in full-year profit in November, citing a drop in orders at a major chipmaker which supplies 3D sensing technology.
“It is of course very disappointing that a substantial inventory correction in the first half of 2018 and the sudden disruption in a significant supply chain and short-term demand for VCSEL wafers in November materially impacted our expected 2018 revenues and profitability,” Chief Executive Officer Drew Nelson said in a statement on Friday.
Peel Hunt analysts, who called IQE’s trading update softer than expected, said the firm’s adjusted core earnings guidance was 13 percent below the broker’s estimates.
IQE also said it expects a charge of about 4.5 million pounds related to lease accounting provision for a facility in Singapore.
Several Asian suppliers and assemblers for Apple have taken a hit after the iPhone maker recently trimmed sales guidance, blaming weak China sales amid trade tensions.
However, the company, whose products are used in microchips found in smartphones, tablets and GPS equipment, reiterated its 2019 and longer term guidance.
“We remain excited by the longer-term prospects, despite the muted near-term semis outlook and a soft start to Q1 for IQE itself,” Peel Hunt analysts said.
(Reporting by Karina Dsouza and Noor Zainab Hussain in Bengaluru; Editing by Anil D’Silva)