UPDATE 1-Fingerprint Cards misses Q1 op profit forecasts as inventories weigh

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STOCKHOLM, May 4 (Reuters) - Swedish biometric firm Fingerprint Cards (FPC) reported earnings well below expectations on Thursday, as excess inventories industry wide and increased competition continue to hit revenue.

The earnings miss comes after the firm scrapped plans last month for what would have been its first dividend.

FPC in March warned that first-quarter revenue would decline by more than 50 percent due to weakened demand from smartphone makers and the inventory build-up of sensors.

FPC’s customers are mainly Chinese smartphone makers such as Huawei and Oppo after making its big break-through in 2015 as demand for fingerprint sensors in smartphones and tablets soared.

It said in Thursday’s report it expected inventories to normalise during the current quarter and repeated it could not forecast earnings for 2017.

The company reported an operating profit of 70.8 million Swedish crowns ($8 million) in the first quarter, lower than the 110 million expected by analysts in a Reuters poll, and sharply down from 589 million a year earlier.

“To safeguard our profitability, we are reviewing our costs and the business at large, to ensure that we invest our resources in the right areas,” Chief Executive Christian Fredrikson, who took charge last August, said in a statement.

Revenue fell by 54 percent to 686 million crowns, lower than the 675 million expected by analysts in the Reuters poll.

“The share has been very weak and even though the underlying figures are OK relative to estimates they are still weak numbers and the remarks on increased competition and remaining high inventory levels in Q2 should hold it back,” SEB said in a note to clients.

$1 = 8.8435 Swedish crowns Reporting by Olof Swahnberg and Helena Soderpalm; editing by Jason Neely