FRANKFURT: Dialog Semiconductor forecast revenues will drop this year as it completes a US$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.
"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.Dialog expects its business with Apple to decline in the coming years as the smartphone maker puts its own main power management integrated circuits into future smartphone models.
"We are entering a new chapter from a position of strength," chief executive Jalal Bagherli told analysts on a conference call.He declined to give revenue guidance for 2020, but said Dialog had"a lot of engines of growth" that would have an impact going forward.Dialog earlier reported a 7 percent decline in fourth-quarter revenue, at the lower end of its guidance.
Dialog expects the smaller business that will remain after the Apple deal to show strong growth in 2019, weighted toward the second half. Some industry players have forecast a quick, V-shaped rebound although continuing weakness in measures of industrial activity such as purchasing managers indexes and inventory builds suggest recovery may be slower in coming.