Wolfson says profit hit by iPhone loss

SHARES in Wolfson Microelectronics fell yesterday after the chipmaker issued a profit warning, blaming its failure to get the contract for the new iPhone for a slump in orders.<br /><br />Wolfson, which makes components for Samsung and Apple products, said that orders for the fourth quarter of 2009 would be worse that expected, and that backlogs for the period had not built up as quickly as usual.<br /><br />&ldquo;Second half revenue forecast and backlog have been adversely affected by a faster than anticipated shift in product mix at a major customer following a previously announced design loss,&rdquo; Wolfson said. &ldquo;Overall visibility of end customer demand remains poor, with very short lead times and volatile ordering patterns.&rdquo;<br /><br />Earlier this year, the Edinburgh-based firm confirmed that it had failed to win the contract to provide chips for the iPhone 3GS &ndash; despite having the contract to do so for earlier models &ndash; and yesterday&rsquo;s announcement gave an indication of how this loss would affect the bottom line.<br /><br />Wolfson said on Monday it expected third-quarter 2009 revenue of about $35m (&pound;22m), $4m less than forecasts, with gross margins to be about 51 per cent.<br /><br />However the company said that a recent design win &ndash; thought to be for a Nokia handset for the US market &ndash; was a &ldquo;very encouraging&rdquo; sign and that it is &ldquo;increasingly confident&rdquo; of strong revenue growth in 2010.<br /><br />Panmure Gordon analyst Nick James retained a &ldquo;hold&rdquo; rating on the stock, adding that he would &ldquo;view any severe weakness in the share price as a buying opportunity&rdquo;.<br /><br />Wolfson announced a second-quarter pre-tax loss of $2.1m in July, with revenue for that period dropping 38 per cent to $33.2m. It will report its third-quarter results on 28 October.