Wolfspeed
shares dropped after the chip company said its next loss would be wider than expected.
Wolfspeed
(ticker: WOLF), whose chips are used in electric vehicles and clean energy, said that costs of building new factories has been “significant” for facilities that aren’t yet generating revenue. It predicted its loss in the current quarter will be between 60 cents and 75 cents a share, wider than the 47 cents analysts surveyed by FactSet anticipated. It also reported worse-than-expected results for the quarter that ended in June.
The Durham, North Carolina-based company has started shipping products from its Mohawk Valley factory and has started building another plant close to its headquarters. Last month, it secured a deal to supply Japanese semiconductor maker
Renesas Electronics
(RNECY) with wafers for 10 years.
Wolfspeed has signed agreements to provide EV chips to
General Motors
(GM),
Mercedes-Benz,
and Jaguar Land Rover.
Shares fell 13% in premarket trading Thursday to $46.01. Before the results, they had gained 23% over the past three months, though they were still down 53% over the past year.
Analysts at Piper Sandler led by Harsh Kumar lowered their estimates for earnings after the results but maintained their Overweight rating on the stock, with a price target of $75. “Fundamentally most things remain on track,” they wrote in a note.
Write to Brian Swint at [email protected]
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