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(Reuters) -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% 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% 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% utilization would represent.”
Operating expenses shot up nearly 28% in the quarter to June 25. That pushed down adjusted gross margin to 29% from 36.5% 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% 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.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shilpi Majumdar)
