NEW YORK - Wolfspeed Inc. (NYSE:WOLF) shares plunged 22% in premarket trading Thursday after the silicon carbide chipmaker reported lower-than-expected revenue for its fiscal first quarter and provided disappointing guidance.
The Durham, North Carolina-based company posted revenue of $194.7 million for the quarter ended September 29, missing analyst estimates of $200.36 million. Revenue was down slightly from $197.4 million in the same quarter last year.
Wolfspeed reported an adjusted loss of $0.91 per share, which was better than the $1.00 loss per share analysts had forecast. However, investors focused on the revenue miss and weak outlook.
For the current quarter, Wolfspeed expects revenue between $160 million and $200 million, well below Wall Street's consensus estimate of $214.6 million. The company projects an adjusted loss of $1.14 to $0.89 per share, compared to analysts' expectations for a $0.90 per share loss.
Commenting on the report, Bank of America analysts said WOLF's strong structural competition in the device market and its cost structure "make it unlikely WOLF will be profitable anytime soon."
"Even with opex headed towards $100mn quarterly sales would need to get towards $300mn just to break even," they highlighted, reiterating an Underperform rating on the stock.
Canaccord Genuity analysts shared a similar sentiment, noting that Wolfspeed fundamentals "have taken another leg down."
"The fundamental stabilization that we have been looking for in order to begin Wolfspeed’s turnaround remains elusive," they added, trimming the target price from $25 to $18.
Wolfspeed said it is transitioning to a fully 200-millimeter silicon carbide manufacturing platform, which will include closing its manual 150-millimeter fab in Durham and reducing its workforce. The company expects these moves to yield approximately $200 million in annual cash savings.
"We delivered 2.5 times YoY growth in our automotive business in the first quarter, and we expect our EV revenue to continue to grow throughout calendar 2025," said Wolfspeed CEO Gregg Lowe in a statement. However, he noted the company is taking actions to enhance efficiency and align with current market conditions.
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