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Technology Stocks : Ericsson overlook? -- Ignore unavailable to you. Want to Upgrade?

To: Eric L who wrote (4836)	9/27/2001 7:15:54 AM
From: elmatador	Respond to of 5390

Mobile sector hit as Gemplus warns SIM card maker says demand soft in Q3, Q4 By Madeleine Acey, FTMarketWatch 11:36:00 AM BST Sep 27, 2001 LONDON (FTMW) - Mobile phone equipment shares fell on Thursday as smart card maker Gemplus warned on third and fourth quarter sales - doubling its loss forecast for Q3. The company's statement followed a full-year profit warning from rival Oberthur [FR:012413, News, Chart, Research] on Wednesday and saw Ericsson [US:ERICY, News, Chart, Research] and Nokia [US:NOK, News, Chart, Research] [SE:000053994, News, Chart, Research] shares fall 2.6 percent and 4.6 percent respectively. Gemplus [FR:005768, News, Chart, Research] shares fell 9.6 percent to €2.56. Oberthur shares were down again on Thursday, by more than 9 percent at €5.09. See Wednesday's Oberthur warning story Softer demand Go deeper News Alerts MarketPulse News Stories Europe US Global News by Email Gemplus said softer demand for GSM SIM modules - removable chips which identify mobile phone owners - and a weaker U.S. dollar meant it now expected Q3 revenue of €225 million to €235 million and a loss of €30 million to €37 million. Previous revised forecasts were for €259 million revenue and a loss of €11 million to €17 million. The company said much of its Southeast Asia business was dollar-dominated and it estimated the currency effect could contribute as much as €8 million or 40 percent of losses. It added that about half of this would be offset by the company's hedging programme. Gemplus said there was no indication that SIM card demand would improve in Q4. Short-term challenge "In the past two weeks, we have seen a rapid deterioration in our revenue prospects for the third and fourth quarter," said Gemplus president and chief executive Antonio Perez. He said he was "quite optimistic" about the mid to long-term prospects for the GSM SIM card marker, but felt the short term would be "very challenging". He added that Gemplus's financial services business had seen customers delay projects in light of economic uncertainty, but said he thought these would be reinstated in the fourth quarter. UBS Warburg wireless communications analyst Sofia Ghachem said the Gemplus news didn't concern her too much in regards to the health of the mobile sector. Although there were a lot of questions for the company following its statement, she believes Gemplus's news wasn't necessarily a leading indicator for the industry but more likely a lagging one. Earlier this month Ericsson [US:ERICY, News, Chart, Research] warned that is saw no clear signs of recovery in the telecoms sector. See story Ghachem said Gemplus's woes could be more to do with pricing pressure and currency issues than any expectation of unit volume reductions. She added that there were questions as to what degree the company could be losing market share in the key growth market of China to local players, and said she hoped the company would clarify things in a conference call this afternoon. Madeleine Acey writes on technology for FTMarketWatch in London.