Wolfson Microelectronics Plc Losses Quadruple To $13m

The shares of Wolfson Microelectronics (LSE: WLF) slipped 19p to 111p during early morning trading after the microchip specialist today announced its fourth-quarter and yearly results.  

The small-cap, which designs a variety of micro-audio devices and specialist software, reported revenue unchanged at $179m and underlying operating losses quadrupling from $3m to $13m.

Wolfson claimed the results were affected by a “volatile” mobile phone market that featured a “faster-than-anticipated transition from 3G to 4G (LTE) smartphones”.

Minor highlights within today’s statement included Mobile Audio Hub sales surging by 40% and MEMS microphone sales zooming 70% higher. The update also revealed year-end net cash at $26m and confirmed a restructure that aims to deliver annualised savings of $10m.

Mike Hickey, Wolfson’s chief executive, said:

“Overall, looking back on a year where we anticipated strong growth, we were disappointed with full year revenue that ended flat year-on-year, with strong sales in the first half being offset by a weaker second half performance.” 

“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. We have secured a $25m bank facility to support this anticipated growth.”

Mr Hickey added that first-quarter revenues could come in between $28m and $36m while gross margins might increase to 45%.

Of course, whether Mr Hickey’s projections, today’s full-year results as well as the wider prospects for the microchip sector all combine to make Wolfson Microelectronics a ‘buy’ right now is something only you can decide.

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> Douglas does not own any share mentioned in this article.