re: Shares drop after Q1 forecast
>> Gemplus Shares Plunge After It Cuts 1st-Quarter Profit Forecast
Florence Labedays
Bloomberg - Paris
April 5, 2001
Gemplus SA shares fell as much as 30 percent after the biggest smart-card maker said first-quarter sales and profit will miss its own expectations as demand from mobile-phone companies, its main customers, slows.
Shares dropped 85 cents to 3.85 euros, after earlier falling to 3.3 euros, the lowest since the company first sold shares to the public, for 6 euros each, in December.
``Gemplus is suffering from a slowdown in mobile phone demand as well as from the economic slowdown,'' Matthieu Viallet, an analyst at Aurel-Leven, said in a note sent to investors. ``We don't expect improvements before the third quarter of 2001.'' Viallet downgraded the shares to ``reduce'' from ``accumulate.''
Gemplus will have a small operating loss in the first quarter after previously expecting a profit, the company said in a statement distributed on Business Wire.
The company cut its first-quarter sales forecast to 290 million euros ($262 million), according to the statement. That's 25 percent more than in the same period last year, but lower than the 32 percent increase it previously forecast.
``The economic slowdown in the wireless industry is clearly affecting demand as our customers assess their businesses,'' Gemplus President Antonio Perez said in the statement.
The company's forecast comes as mobile phone makers, including Nokia Oyj, which sells one out of every three cellular phones, have cut outlooks for industry growth this year.
Gemplus, which makes about three-quarters of its sales from telecommunication chips, said the drop in revenue would lead to ``unfavorable manufacturing variances'' in its European factories, and that it will announce measures to reduce these shortly.
In the fourth quarter, Gemplus' net income was 40.6 million euros ($37 million), or 6 cents a diluted share, compared with a loss of 49.4 million euros, or 15 cents, in the year earlier period. Sales rose 48 percent to 386 million euros, boosted by mobile phones. <<
- Eric - |
