Rakon cuts full-year guidance on delayed sales, thinner consumer margins

Rakon 5-year NZX performance (S&P Capital IQ; click to zoom)
Rakon 1-year NZX performance (S&P Capital IQ; click to zoom)

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.

(BusinessDesk)


This article is tagged with the following keywords. Find out more about MyNBR Tags

1 Comment & Question

Commenter icon key: Subscriber Verified

At least they are consistent.

Reply
Share
  • 0
  • 0

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7285 -0.0001 -0.01%
AUD 0.9353 0.0006 0.06%
EUR 0.6426 0.0000 0.00%
GBP 0.4836 0.0004 0.08%
HKD 5.6468 -0.0011 -0.02%
JPY 85.8740 -0.3570 -0.41%

Commods

Commodity Price Change Time
Gold Index 1257.0 -28.890 2015-01-29T00:
Oil Brent 50.1 0.560 2015-01-29T00:
Oil Nymex 44.5 0.000 2015-01-29T00:
Silver Index 16.8 -1.310 2015-01-29T00:

Indices

Symbol Open High Last %
NZX 50 5759.8 5766.7 5759.8 -0.27%
NASDAQ 4635.7 4688.4 4638.0 0.98%
DAX 10801.4 10804.0 10737.9 -0.01%
DJI 17195.3 17433.1 17191.4 1.31%
FTSE 6810.6 6844.0 6810.6 -0.54%
HKSE 24771.4 24771.4 24595.8 -0.36%
NI225 17788.7 17808.5 17606.2 0.39%