Return to profitability expected on record design-in contract wins
Wolfson Microelectronics has reported a 26 per cent drop in first quarter sales. Revenues dropped from £25.3 million last year to £18.7 million for the three months to April 1, 2012.
The Edinburgh-based electronics firm, which makes microchips and audio components for smart phones and tablet computers, said pre-tax losses for the quarter widened to £5.2 million compared to a loss of £2.2 million last year.
However Wolfson said the drop in first quarter sales and subsequent increase in losses had been expected, adding the first quarter had been a record in value terms for design-in contract wins to supply components to both new and existing customers.
New, but unnamed, customers include a “major Chinese computer and telecommunications enterprise” a “Japanese multinational” and a “large consumer electronics manufacturer”.
Wolfson said it expects second quarter revenues of between £22.2 million and £25.9 million and “a return to sustainable growth and underlying profitability”.
Chief executive Mike Hickey said: "Revenue for the first quarter of 2012 was in line with previous guidance and reflected normal seasonality.
“The underlying fundamentals of the business have continued to improve as consumers demand better audio from their electronics products, such as smartphones, tablet computers and gaming devices.
“This is driving some quite disruptive technology trends that favour Wolfson products - resulting in a record design-in performance in the first quarter.
“These favourable technology trends, strong customer adoption and with record design-ins transitioning to revenue in line with our expectations, position the company well for a step up in revenues and a return to underlying profitability as 2012 progresses.”
Wolfson posted flat results for the 2011 year with operating losses having doubled to £9.3 million, though the firm reported record forward orders at the year end, which it had said would filter through in future results.
Revenue at the year end in mobile phones, PC/tablet computers and gaming rose by approximately 33 per cent, 90 per cent and 25 per cent respectively.
Wolfson said the launch of 24 new products last year, including the world's first HD Audio System-on-Chip (SoC) and a record 382 new design-ins (products designed based on Wolfson components) will contribute to 2012 revenues.