1. Apple Inc supplier Imagination Tech warns of H1 loss on semiconductor slowdown

Apple Inc supplier Imagination Tech warns of H1 loss on semiconductor slowdown

Imagination Technologies , the British company that supplies graphics technology to Apple Inc, forecast a surprise first-half loss due to a weaker semiconductor market.

By: | Published: September 16, 2015 6:26 PM

Imagination Technologies , the British company that supplies graphics technology to Apple Inc, forecast a surprise first-half loss due to a weaker semiconductor market.

It said on Wednesday the drop in demand was driven in part by sharply slowing growth rates in emerging economies, and in particular the Chinese market.

Shares in Imagination, which dipped when Apple disappointed the market with its own forecasts in July, were down 10.5 percent at 232.25 pence by 0750 GMT.

Analysts estimate Apple accounts for just over a third of Imagination’s revenues, with most demand coming from the iPhone.

Imagination said overall unit shipments and royalty revenue in the industry’s June quarter were slightly lower than its expectations, which was likely to lead to it making a loss in its fiscal first half to the end of October.

Worries about the strength of the market were eased on Monday, however, when Apple said advance orders of its new iPhone were strong and it was on track to beat the 10 million units previous versions logged in their first weekend last year.

Imagination said that, based on customer product launches, and the strength of its licensing pipeline, it now expected a stronger second half than it had previously forecast.

“However, at this early stage of the year, we cannot be certain that we will recover all of the first-half shortfall,” the company said.

Jefferies analyst Robert Lamb said he thought the company may struggle to achieve year-on-year operating profit growth, and analysts’ consensus forecast would have to come down by at least 20 percent.

Analysts had expected Imagination to report a pretax profit of 21 million pounds ($32 million) for the year ending April 2016, according to Thomson Reuters data.

($1 = 0.6518 pounds)

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Tags: Apple Inc
  1. N
    Nathillien
    Sep 16, 2015 at 6:20 pm
    In order to prove the s growth it will be not enough for Apple to beat the 10M opening weekend s since this year China is part of it while last year this was not the case. Last years combining World and China opening weekend s were 20M and that is the number Apple needs to beat this time around. But of course Apple's marketing will try to obscure this fact. Come on.
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