Dec. 20 (BusinessDesk) – Rakon, which makes crystal oscillators used in mobile phones and navigation systems, cut its full-year earnings guidance because of sales delays and thinner margins.
Earnings before interest, tax, depreciation and amortisation would be $8 million to $12 million in the year ending March 31, down from its August guidance of $14 million to $16 million.
The downgrade is “due to a delayed sales programme in the High Reliability and Smart Wireless Device segments of its business, plus a forecast decline in margin from some consumer products,” managing director Brent Robinson said in a statement to the NZX today.
The shares fell 2.4 percent to 40 cents after the statement and have declined 8.9 percent this year. The stock is rated ‘outperform’ based on four recommendations compiled by Reuters with a price target of 55 cents.
The former tech darling of the market reached $5.80 a May 2007, a year after its listing.
Robinson said the company was on track with its cost cutting efforts aimed at saving $10 million a year. It said 70 percent of the changes would be in place by April 1 next year. Last month Rakon said it would cut up to 60 New Zealand jobs as it shifts more manufacturing to China and India in a bid to lower costs and widen profit margins.