Wolfson had Q3 revenues of $40.4m up 5% on Q2 but down 14% on Q3 2010’s $47.1m for an operating loss of $700,000 compared to a loss of $2.9m in Q2 which rises, after exceptional charges, to a $10m operating loss in Q3 compared to $3.5m in Q2.
‘Weak consumer demand, along with some customer product delays, have impacted the Company’s 2011 revenue growth expectations and prevented a return to full-year profitability,’ says Wolfson, ‘and although the company expects headwinds for another couple of quarters until significant design-ins translate to revenue, the underlying fundamentals of the business continue to improve. This improvement is being driven by an accelerating technology trend in consumer electronics devices to “off board” audio from central processors to standalone audio devices where Wolfson audio hub products have a leadership position.’
‘This fundamental technology transition is creating a large addressable market opportunity for audio hubs where Wolfson is strongly positioned to capture good share,’ says the company, ‘this changeover is increasingly evident in smartphones and tablet PCs, and is also being adopted across other consumer electronics product applications. The Company is playing a leading part and already benefitting from this end-product architecture evolution.’
‘This, plus high exposure to fast growing product applications, such as smartphones, tablet PCs, eBook readers and gaming, and with secured design-ins working their way through to revenue in the second half of 2012, positions the Company well to improve sales growth and profitability as its target markets continue to develop and overall consumer demand recovers.’
Q3 gross margin was 49.7% compared to Q2’s 47.4%.
Q3 sales growth in mobile audio hubs was 24% up on Q2 and 34% up on Q3 2011.
In the first nine months of September sales have grown 8% over the first nine months of 2010.
“Against a backdrop of deteriorating macro-economic conditions and low consumer confidence, we were able to grow our third quarter revenue sequentially with incremental revenues from 2010 designs-ins offsetting general market reductions,” says Wolfson CEO Mike Hickey, “the sharp reductions in customers’ near-term forecasts seen during the summer months have not been repeated, and order intake has stabilised, albeit at somewhat lower levels than previously anticipated.”
In Q3 2011, compared to Q3 2010, sales to mobile phone applications were up 9%, sales to tablet/PCs grew by 95% and mobile gaming grew by 21%.
The company had 79 new design-ins in Q3 2011 giving a total of 272 for the nine months to the end of September. This is mostly being driven by the adoption of audio hubs and is increasing share with existing customers (including design-ins this quarter for two new high volume 2012 smartphones) and winning share in new customers
Eight new products were launched in Q3 2011 and 19 in the first nine months of the year.
Wolfson started shipping MEMS silicon microphones in volume to a major mobile phone manufacturer
“Whilst visibility for Q4 2011 and into 2012 remains limited,” says Hickey, “our strong design-in performance continues, including the addition of two new high volume next generation smartphone design-ins this quarter, increasing our share with existing customers. Coupled with high exposure to still growing markets such as smartphones, tablet PCs, eBook readers and gaming, the Company is well positioned to weather the current challenging environment and improve sales growth and profitability as our target market continues to grow and once consumer spending picks up.”