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Dialog Semiconductor raises second-quarter profit outlook

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Dialog Semiconductor raises second-quarter profit outlook
Dialog semiconductor logo is pictured at a company building in Germering near Munich, Germany August 15, 2016. REUTERS/Michaela Rehle   -   Copyright  Michaela Rehle(Reuters)
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FRANKFURT (Reuters) – Anglo-German chip designer Dialog Semiconductor on Wednesday raised its second-quarter earnings outlook, citing strong revenue and gains from a transfer of assets to iPhone maker Apple.

Dialog shares were expected to open 4.3% firmer.

The company said it expects operating profit of $216 million(173.97 million pounds) and underlying operating profit of $82 million in the quarter, adding that it also expects revenue at 1% over the high-end of the guidance range posted in May.

The operating profit includes $28 million in one-offs, including $16 million on the transfer of assets to Apple and $12 million from non-recurring engineering contracts.

Dialog completed a $600 million deal in April to transfer programmers and patents to Apple. That delivered a cash windfall and left the smaller company less reliant on the iPhone maker, which had accounted for three-quarters of revenue.

In May, the chip designer had forecast a recovery in demand after sales of its rapid-charge products were affected in the first quarter by weak demand in China.

The company expected a sequential rise in revenue in the second quarter, and the second-half would be stronger than the first, as weakness in China faded towards the end of the first quarter, CEO Jalal Bagherli had said.

Weakness in China and mounting trade friction between Beijing and Washington had caused inventories to pile up in the semiconductor supply chain.

(Reporting by Arno Schuetze, Editing by Sherry Jacob-Phillips)

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