February 25, 2014 / 10:40 PM / 4 years ago

UPDATE 1-Chipmaker Avago says it lost revenue from smartphone maker

By Sruthi Ramakrishnan

Feb 25 (Reuters) - Chipmaker Avago Technologies Limited said it expects current-quarter sales to decline 3-6 percent from the first quarter as it lost revenue from a smartphone maker, which analysts said could be Apple Inc .

The company, which designs and develops analog semiconductors, said in a statement on Tuesday the revenue decline was due to annual product transition at a “major smartphone OEM customer.”

Avago did not name the manufacturer in the statement. Its customers also include Samsung Electronics Co Ltd and LG Electronics Inc.

“I believe they are referring to Apple and the seasonal nature of the Apple’s handset and iPad production schedules,” RBC Capital Markets analyst Doug Freedman told Reuters.

D. A. Davidson & Co analyst Thomas Diffely said it was a combination of weak sales at Apple in the fourth quarter and slowing sales of Samsung’s phones ahead of the launch of the company’s new Galaxy phone.

Apple, which accounted for more than 10 percent of Avago’s revenue for the year ended Nov. 3, reported lower-than-expected iPhone sales in the holiday quarter.

While Apple is widely expected to launch a new iPhone as early as next year, Samsung will roll out its Galaxy S5 smartphone globally on April 11.

Avago gets nearly half its revenue from its wireless business, which makes radio frequency, power amplifier and other chips used in smartphones.

The company’s net income rose to $134 million, or 53 cents per share, in the quarter ended Feb. 2, from $125 million, or 50 cents per share, a year earlier.

Excluding items, the company earned 84 cents per share.

Revenue rose 23 percent to $709 million.

Analysts on average had expected earnings of 78 cents per share on revenue of $705.3 million, according to Thomson Reuters I/B/E/S.

Shares of the company were little changed in extended trading after closing at $59 on the Nasdaq on Tuesday.

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