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:Wolfspeed predicted a larger-than-feared quarterly loss, in a sign that costs are rising at a faster pace than sales at the chip firm whose products are used in sectors ranging from electric vehicles to renewable energy.
Its shares fell 14 per cent in extended trading on Wednesday, after the company also forecast quarterly revenue below market estimates.
“We are incurring significant factory start-up costs relating to facilities that we are constructing or expanding that have not yet started revenue-generating production,” Wolfspeed said.
It expects adjusted loss per share to be between 60 cents and 75 cents in the first quarter, compared with analysts’ estimate of a 29-cent loss, according to Refinitiv data.
The midpoint of its quarterly revenue forecast of $220 million to $240 million was also below expectations of $233.2 million.
The company began shipping products from its Mohawk Valley fabrication plant in the fourth quarter. It recently broke ground on a 200-millimeter silicon carbide materials facility in Siler City, close to its headquarters in Durham, North Carolina.
CFO Neill Reynolds said the company still expects to reach 20 per cent utilization out of Mohawk Valley by the end of fiscal 2024.
But “it will be the second half of calendar year 2024 before we see $100 million of quarterly revenue from the fab that the 20 per cent utilization would represent.”
Operating expenses shot up nearly 28 per cent in the quarter to June 25. That pushed down adjusted gross margin to 29 per cent from 36.5 per cent a year earlier.
The company’s quarterly adjusted loss per share was 42 cents, compared with a 20-cent loss estimate. Revenue rose about 3 per cent to $235.8 million, beating estimates.
The results were Wolfspeed’s first since it said in mid-July supply chains would not get affected by China’s move to restrict exports of gallium, a minor metal it uses in its products.
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