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)


1 · Got a question about this story? Leave it in Comments & Questions below.

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 0.7047 0.0037 0.53%
AUD 0.9392 0.0013 0.14%
EUR 0.6282 0.0013 0.21%
GBP 0.5433 0.0023 0.43%
HKD 5.4885 0.0297 0.54%
JPY 78.5830 0.1220 0.16%

Commods

Commodity Price Change Time
Gold Index 1255.5 -9.660 2017-05-23T00:
Oil Brent 54.4 0.260 2017-05-23T00:
Oil Nymex 51.5 0.340 2017-05-23T00:
Silver Index 17.1 -0.050 2017-05-23T00:

Indices

Symbol Open High Last %
NZX 50 7386.0 7421.8 7384.7 0.50%
NASDAQ 6154.2 6166.1 6138.7 0.40%
DAX 12631.4 12662.0 12659.1 -0.13%
DJI 20949.2 21022.8 20937.9 0.36%
FTSE 7485.3 7519.6 7485.3 0.40%
HKSE 25382.3 25428.5 25403.2 0.10%
NI225 19777.6 19782.8 19613.3 0.66%
ASX 5760.2 5776.0 5760.2 0.15%