British technology firm IQE Plc forecast a significant growth in sales during the second half and beyond with trading returning to pre-recession levels, but its shares fell 11 percent as investors booked profits.
The company, whose semiconductor wafer products are used in mobile handsets, Wi-Fi, WiMAX, DVDs, laser printers and photocopiers, saw a pick-up in sales towards the end of the first half as destocking ended.
IQE is comfortable with full-year market view on revenue of 52 million pounds to 53 million pounds, Finance Director Phil Rasmussen told Reuters.
The company's shares, which gained 80 percent in the last 3 months, fell 8 percent to 14.75 pence at 1212 GMT on the London Stock Exchange.
Today's share fall is partly a reflection of profit-taking with retail rather than institutional investors primarily behind the trading volume, Noble analyst Arun George told Reuters.
Secondly, the market was expecting the full-year forecast to be raised but at this stage the company has maintained it at the current level, he added.
MARKET SHARE GAINS
The company, which gets more than two-third of its revenue from wireless market, is benefitting from the growth in smartphone market.
Apple did everybody a great favour by inventing iPhone...and obviously there are a lot of companies copying the same kind of model, Chief Executive Drew Nelson said in an interview.
A smartphone has something like four times as many of IQE's chips in it than a conventional 2.5G or 2.75G phone, Nelson said.
IQE -- whose customers include TriQuint Semiconductor Inc, RF Micro Devices Inc and Anadigics Inc -- has a share of 30 percent in the outsourced wafer market, which is worth more than $300 million.
The company expects its market share to go up to 40 percent to 45 percent in next three to four years, Nelson said.
EBITDA REMAINS POSITIVE
For the first half ended June 30, earnings before interest, tax, depreciation and amortisation (EBITDA) was 1.9 million pounds, compared with 3.6 million pounds in the year-ago period.
Adjusted operating loss was 0.8 million pounds, compared with a profit of 1.6 million pounds last year.
Revenue fell 29 percent to 21.4 million pounds, reflecting a tough first quarter in which destocking continued from the downturn.
Net debt of 18.9 million was lower than market view of about 20 million pounds.
(Editing by Jarshad Kakkrakandy)