Apple Supplier AMS Sees Weak First Quarter, Skips Dividend
Sensor specialist AMS expects revenue in the first quarter of 2019 to fall to USD 350-390 million amid continued weak smartphone demand and first-quarter consumer market seasonality, it said.
The Austrian group said it would not pay a dividend for 2018 after its adjusted operating profit fell more than half in the fourth quarter, pulled down by slowing demand from a major customer and restructuring costs.
AMS results added to a bleak earnings season for semiconductor companies and further stoked fears of an industry slowdown after sales warnings from Apple, Samsung and Taiwan Semiconductor last month pointed to stagnating smartphone demand and a cooling Chinese economy.
German chipmaker Infineon Technologies on Tuesday revised down its guidance for full-year revenue growth and said it would trim investments, saying it faced an “increasingly difficult business environment”.
“Reflecting a more volatile end market and macro-economic environment, AMS has decided to suspend its cash dividend policy for the fiscal year 2018 to focus on strengthening its business position in 2019,” AMS said.
Its shares were indicated nearly 10 percent lower in pre-market activity.
AMS provides Apple with optical sensors for 3D facial recognition features on its newest iPhones and generates around 45 percent of sales from that, according to analysts. Lower-than-expected demand for these phones, especially in China, has put pressure on AMS.
Analysts have highlighted increasing competitive pressure, a threat from new technologies, overcapacity issues and a high debt level facing the company.
The group said net debt increased to $1.36 billion per end-December from USD 987.9 million a year ago.
AMS said 3D sensor deliveries to two Asian Android smartphone makers agreed last year have started shipping or will start in the first half of 2019.
It has finished a solution for sensors capable of scanning surroundings in 3D, so-called world-facing 3D sensors, for a major Android manufacturer and expects shipments to start in the current quarter, it said.―CNBC
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