October 31, 2018 / 9:06 AM / 14 days ago

Dialog bucks semiconductor gloom ahead of strategy update

* Q3 profits ahead of expectations, upbeat on Q4

* Recently announced $600 mln power chip deal with Apple

* To present strategy update on Thursday

* Shares up 9 percent

FRANKFURT, Oct 31 (Reuters) - Dialog Semiconductor posted forecast-beating third-quarter results on Wednesday and gave an upbeat view for the year, even as Korean electronics giant Samsung Electronics cautioned that a two-year memory chip boom is over.

Shares in the Anglo-German chip designer rose by 9 percent, building on gains made on the back of a $600 million deal with Apple that was announced after the quarter closed.

Dialog has agreed to transfer people and patents to Apple that are key to making the power-management chips at the heart of the iPhone. It will brief investors on its strategy as a smaller, but more diversified, business in London on Thursday.

“Our recent agreement with Apple strengthens our long-term partnership and delivers immediate value for shareholders,” CEO Jala Bagherli said in a statement.

Dialog would build its expertise in mixed-signal mobile power applications, Bagherli added, and focus on high-growth segments of the Internet of Things, mobile, automotive and computing and storage markets.

Semiconductor stocks have been hit hard in October by mounting evidence that a turning business cycle and escalating trade tensions will bring an end to a global boom that propelled Samsung to record quarterly profits.

The South Korean electronics giant has called a downturn in the memory chip market. Dialog’s fate is more closely tied to that of Apple, which is expected to account for three-quarters of revenues this year.

Dialog said third-quarter revenues rose 6 percent to $384 million, while underlying operating profits were up 9 percent to $83.7 million, ahead of mean expectations in a poll of analysts.

It forecast fourth-quarter revenues in the range of $430-$470 million, while full-year revenues were seen up 8 percent. Analysts at Baader Helvea described the results as solid and said the outlook was above consensus.

Dialog also said it would launch a buyback of 100-150 million euros of its stock. At an assumed average price of 21 euros a share that would out at 7.1 million shares, the firm said. (Reporting by Douglas Busvine Editing by Keith Weir)

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