By Shares of Ams-Osram took a nosedive after the company announced a cut to its adjusted earnings guidance for 2024 and revealed that it is reevaluating its microLED-program strategy following the unexpected cancellation of a cornerstone project.
Steep Decline in Shares
As of 0813 GMT on Thursday, shares plunged by 43% to CHF1.26, marking a decrease of more than two-thirds in value over the past year.
Adjusted Earnings Revised
The Austrian electronics company disclosed late Wednesday that it anticipates 2024 adjusted earnings before interest and taxes to fall between 30 million euros and 50 million euros ($32.5 million and $54.2 million), citing decreased capitalization of research and development expenses and reduced government funding program subsidies.
Additionally, Ams-Osram expects to incur non-cash impairment charges on microLED assets and goodwill ranging from EUR600 million to EUR900 million.
Impact on Financials
Despite the revised earnings outlook, the company forecasts revenue for the first quarter to range from EUR800 million to EUR900 million, with an adjusted EBIT margin of 4% to 7%. The cancellation of the project is expected to have a positive effect on cash flow over the next 24 months.
Revised Targets
Ams-Osram has revised its mid-term revenue target to a growth range of 6% to 8%, excluding its non-core semiconductor portfolio and the lamps and systems related divestiture in the first quarter, down from the previous range of 6% to 10%.
Comments