Smartphone component supplier Laird warns of lower FY profit, shares plunge

Reuters News
Posted: Oct 19, 2016 2:31 AM

(Reuters) - Laird Plc <LRD.L>, a supplier to smartphone makers including Apple Inc <AAPL.O>, plummeted in early trading after it warned of lower full-year profit, saying that production growth for mobile devices this year was lagging previous cycles and that it had "poor" visibility on order volumes.

Shares in the company nearly halved to 156.10 pence posting its worst single day drop.

The electronic component maker's profit warning follows troubles facing Samsung Electronics Co Ltd <005930.KS>, which analysts say is a key customer for Laird.

Samsung scrapped its flagship Galaxy Note 7 smartphone last week less than two months after its launch, after failing to resolve safety concerns with the device.

Laird said it expected full-year underlying pre-tax profit to be about 50 million pounds ($61 million), lower than 73.1 million pounds it earned in the year ended December 2015, adding that it "experienced increased margin pressure due to unprecedented pricing pressures."

Laird, which is on Apple's official list of suppliers, had not previously given any guidance for the full year.

Apple said in July that it had sold 40.4 million iPhones in the third quarter, down 15 percent from the year-ago quarter, noting a drop in sales for its flagship product for the second straight quarter.

Laird said on Wednesday that revenue in the performance materials unit, its biggest business by revenue, fell 5 percent on a constant currency basis in the third quarter ended Sept. 30.

In August, Laird lost its top boss to struggling British aerospace and defense company Cobham Plc <COB.L> and appointed CFO Tony Quinlan to take over as chief executive on Sept. 5.

(This version of the story was refiled to say correction was in paragraph 5, not 2. The story was corrected earlier to add dropped word 'pre-tax')

(Reporting by Pranav Kiran in Bengaluru; Editing by Gopakumar Warrier and Amrutha Gayathri)