Earnings down (again) at Wolfson Microelectronics

Blames volatility of phone market and speed of 4G adoption

faster-than-anticipated transition to 4G -hickey

Tiny Edinburgh audio manufacturer Wolfson Microelectronics, which provides smartphone components for the likes of Samsung, took another battering in 2013, latest full year and Q4 figures reveal. In the final quarter revenue slumped to $42 million compared to $56 million the year previously, while Wolfson also recorded a loss of $4.5 million against a profit of $1.5 million in 2012. Full year revenues remained flat at $179 million, resulting in a loss of $20 million – nearly 11 times that of 2012. In an accompanying statement Wolfson blamed the downturn on volatility in the mobile phone market accompanied by a faster-than-expected transition to 4G which, it says, benefited an unnamed competitor more.

Attempting to put a gloss on the figures, however, Wolfson insisted its relationship with Samsung.

It said its relationship with the South Korean phone giant was “stronger than ever” as a primary audio partner and with its products in phones such as the Galaxy S4 3G and Win 4G range, as well as in Samsung cameras and tablets.

Commented Wolfson CEO, Mike Hickey, “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.”

“This was caused by a faster-than-anticipated transition from 3G to 4G (LTE) smartphones, which benefited a competitor that was also the dominant supplier of the LTE platforms deployed in 2013, and a very volatile end market environment.

“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 $25 million bank facility to support this anticipated growth.”

About Dave Evans

Dave Evans is a long established commentator on both the IT and cellular industries. His current focus is on share price trends within the sector. You can email him here
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