Wolfspeed Inc. shares experienced a significant drop of 13% in Wednesday’s after-hours trading. This decline followed the company’s announcement of a wider-than-expected loss for the latest quarter, coupled with a projection of steeper losses for the current period.
For the fiscal fourth quarter, the silicon-carbide chip company reported a net loss from continuing operations of $113.3 million, or 91 cents per share. In comparison, during the same period last year, the company’s loss amounted to $61.8 million, or 50 cents per share.
On an adjusted basis, Wolfspeed reported a loss of 42 cents per share from continuing operations, significantly higher than the anticipated loss of 20 cents per share according to analysts surveyed by FactSet.
Despite the disappointing loss, the company did see growth in revenue, which increased to $235.8 million from $228.5 million. This surpassed analysts’ projections of $224.5 million.
Looking ahead to the fiscal first quarter, Wolfspeed expects to generate revenue between $220 million and $240 million. However, the company also foresees an adjusted per-share loss ranging from 60 cents to 70 cents. This projection contrasts with the FactSet consensus of $234 million in revenue and an adjusted loss per share of 29 cents.
In light of recent developments, Chief Executive Gregg Lowe emphasized the importance of scaling their materials and device capacity throughout fiscal 2024. He expressed confidence in Wolfspeed’s appeal to customers for their silicon-carbide device needs, citing approximately $8.3 billion in customer design-ins secured over the past year.
It is worth noting that the company is currently incurring significant startup costs for the construction and expansion of facilities that have yet to begin revenue-generating production. These expenses are reflected as operating costs in Wolfspeed’s financials.