Jan 21 (Reuters) - IQE Plc said its core earnings jumped about 49 percent in 2013, allaying concerns that slowing growth in the global smartphone market was hurting the British semiconductor materials maker.
IQE shares jumped as much as 10 percent after the company also estimated 2013 revenue to be at least 126 million pounds ($207 million), up 43 percent from a year earlier.
The company, which makes parts for microchips used in smartphones, tablets and GPS equipment, had warned in September of short-term uncertainty due to weakness in the global smartphone market.
IQE’s clients include chipmakers such as Skyworks Solutions Inc, Triquint Semiconductor Inc and RF Micro Devices Inc, which make chips for Apple Inc’s iPhone and Samsung Electronics Co’s Galaxy phones.
Market research firm Gartner said last week that tablet sales are expected to jump 47 percent this year, while mobile phone sales are expected to continue to increase, but at a slower pace.
Skyworks, one of IQE’s biggest customers, reported a 44 percent jump in quarterly profit last week, helped by increased demand for its chips and forecast second-quarter profit above estimates.
The Cardiff, Wales-based company estimated full-year earnings before interest, taxes, depreciation and amortization (EBITDA) of at least 24.5 million pounds ($40.23 million) compared with 16.4 million pounds a year earlier.
Despite a weak guidance from a number of IQE’s wireless customers for the fourth quarter of 2013 and the current quarter, the company reassured the market on Tuesday with sequential growth in the second half.
Margins improved in the second half, suggesting that the company benefited from recent acquisitions earlier than expected, finnCap analyst Lorne Daniel said.
IQE, which is expected to report results in March, said it was able to renew existing contracts with key wireless customers towards the end of 2013.
IQE shares were up 6.7 percent at 27.7 pence at 1156 GMT on Tuesday on the London Stock Exchange. The stock had lost 19 percent value since the warning in September.