Wolfson stung by changes in mobile market

 
Harriet Green
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AUDIO semiconductor company Wolfson Microelectronics saw its shares plunge as much as 15 per cent yesterday morning, after it reported a loss during the quarter with dwindling revenues and gross margins.

Cancellations from one of the Blackberry and Samsung supplier’s major customers have led to increasingly difficult trading for Wolfson over the last year.

The Edinburgh firm said revenue was hit by a “very volatile” phone market and the faster-than-expected transition to 4G smartphones “benefitting a competitor”.

Revenue fell 25 per cent from $56.1m (£34.4m) to $42m in the fourth quarter from a year earlier. For the year as a whole revenue was flat.

Wolfson reported a loss of $20.4m – up 53 per cent from the $9.4m loss seen in 2012. Wolfson said that its strong growth in the first half of the year had been offset by a weaker second half. Revenues for the year fell 21 per cent, “as demand from key customers slowed markedly… the largest customer in 2013 represented 47 per cent of revenue”.

Looking ahead chief executive Mike Hickey said, “We expect to resume our growth trajectory in the second half of 2014 as customer phone inventories unwind; customers’ new products launch with Wolfson’s next generation, higher content Audio Hubs; and we benefit as new LTE platforms come to market.”

Wolfson’s shares closed down five per cent following the disappointing results at 125p a share yesterday.