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Shares of Wolfspeed (NYSE:WOLF) are down about 23% in pre-market Thursday trading after the semiconductor device company offered very soft guidance for its fiscal second quarter.
WOLF reported an FQ1 loss per share of $0.04 on revenue of $241.3 million, which is better than the analyst expectations of a loss per share of $0.05 on revenue of $239.77 million.
However, Wolfspeed said it expects its FQ2 revenue to decline to $225 million at the midpoint of a range, while analysts were looking for $252.6 million. The FQ2 outlook suggests a near 7% revenue growth decline relative to FQ1. The company also said it expects to lose between $0.16 and $0.08 while the Bloomberg consensus was calling for a profit of $0.01 per share.
Morgan Stanley analysts cut the price target to $88 per share from $106 and commented:
“Despite the robust business pipeline, there were multiple setbacks – a supplies issue holding back revenue in the December quarter, a manufacturing transition issue in Durham, which will be a long-term GM headwind, and constraints on equipment/spares holding back fab expansion.”
BMO analysts said the results will “hardly” instill confidence in investors “heading into the Analyst Day and in front of potentially a large capital infusion that is needed to fund the company’s expansion plans.”
The analysts cut the price target to $85 from the prior $100 per share and continues to rate WOLF shares Market Perform.
