FRANKFURT: Dialog Semiconductor forecast revenues will drop this year as it completes a $600 million transfer of programmers and patents to iPhone maker Apple, but still won market plaudits as it said its remaining business would grow strongly.
Shares in the Anglo-German chip designer rose by 6.6 per cent after its forecast of a single-digit percentage revenue drop this year proved marginally more optimistic than a consensus view among analysts of a 9 per cent fall.
The Anglo-German chip designer struck a deal in October to reduce its exposure to Apple, which accounts for three-quarters of revenue, helping it weather a downturn in iPhone sales better than other suppliers to the smartphone maker.
The transaction is expected to close in the first half of the year, handing Dialog a cash windfall to back its transition to a smaller, more diversified business.
“We find this transformation of Dialog’s business compelling, and think its current valuation overly discounts the risk associated with the company’s evolving business model,” Barclays analyst Andrew Gardiner said in a note. — Reuters
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