Rakon cuts full-year guidance on delayed sales, thinner consumer margins
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 says in a statement to the NZX today.
Rakon shares fell 2.4% to 40 cents after the statement and have declined 8.9% 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.
Mr Robinson says the company is on track with its cost cutting efforts aimed at saving $10 million a year. It said 70% 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.