IQE suffers from wireless industry caution
The strength of the pound against the dollar and customer de-stocking in the wireless industry saw technology firm IQE suffer a 17% fall in revenue.
IQE
26.50p
14:14 25/04/24
One of Wales’ top technology companies, IQE reported pre-tax losses of £2.3m for the six months ended 30 June, compared to a pre-tax profit on £2.4m in the same period in 2013, but this was in line with its recent pre-close update.
Revenues fell to £52m, a £6.3m dip year-on-year, while the company said losses were affected by £3.1m in restructuring costs and £4.8m in exceptional non-cash items.
“The group has again demonstrated the resilience of its business model through the delivery of continued growth in profitability despite the lower than expected revenues resulting from adverse effects of a significant inventory correction in the wireless industry and the effect of a strengthening of the sterling exchange rate against the US dollar,” said group chief executive Drew Nelson.
The company said that demand for wireless technology recovered during the second quarter, highlighting that the product will play an important role in driving the firm’s growth in the long term future.
"Wireless will continue to be a long term growth driver for our business as increasing connectivity continues to drive increasing demand for compound semiconductor devices,” explained Nelson.
The group's strong reputation in the growing photonics space was translating into an encouraging level of contract wins, he added.
Analysts at Peel Hunt cut their 2015 and 2016 revenue forecasts to reflect a more cautious outlook for wireless growth, given the evident unpredictability of inventory cycles in the segment, leading to EPS of 2.6p and 3.0p respectively.
IQE shares were down 11.25% to 17.75p at 11:29 on Tuesday.