Wolfson misses out on Apple players
LONDON (Reuters) - Chip-maker Wolfson Microelectronics (WLF.L) said it had not been picked to supply parts to portable media players by a major customer, which a person familiar with the company said was Apple (AAPL.O).
Shares in the Edinburgh firm, which supplies chips used in Apple's iPod and iPhone, plunged as much as 30 percent to a 3-1/2 year low of 99 pence in early Thursday trading.
Wolfson said the new players were due to be launched in the third quarter of 2008, and that its second-half revenues would be hit as a result.
The person familiar with the matter told Reuters the products in question were the latest versions of Apple's iPod Nano and iPod Touch.
At 9:00 a.m. Wolfson shares, which had already fallen 30 percent this year, were down 22 percent at 111.25 pence, valuing the company at 131.5 million pounds, even though Wolfson said full-year revenues would still be in line with market forecasts.
Wolfson said a strong performance from its other applications such as handsets and GPS systems would mitigate the setback, as it continues to diversify away from music players.
However, analysts at Cazenove said confidence in the company's current full-year forecasts required a "leap of faith" from investors in light of the news, and downgraded 2008 revenue forecasts to $245 million (121.8 million pounds), compared with $230 million last year.
Analysts had been expecting revenues of $250.8 million this year, according to Reuters estimates.
"IPods have been a big contributor historically to revenues, so it's pretty disappointing for them," said Nick James, an analyst at Panmure Gordon, though he added that Wolfson was still supplying the iPhone and that handset growth was encouraging.
Wolfson Chief Executive Dave Shrigley said last month he had reduced internal forecasts for 2008 due to macro-economic concerns, and that he was concentrating on the firm's 'AudioPlus' strategy, a diversification away from pure audio products.
Revenue from applications other than portable media players such as the iPod grew 22 percent last year and represented 76 percent of group total, the company said.
It reiterated earlier guidance for first-quarter revenues of $44-48 million, and said it was still confident of achieving growth in 2008.
(Reporting by John Bowker, editing by Will Waterman)
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