Fingerprint Cards revises Q4 earnings down
Fingerprint Cards has revised its fourth quarter 2017 earnings downward, predicting a 62 percent decline in revenue from the same quarter a year ago due to weak market development and price pressures on capacitive sensors.
The Chinese smartphone market has weakened during the quarter, the company estimates, and it expects revenues to remain weak in Q1 2018.
Fingerprint Cards now estimates revenues for Q4 2017 of SEK 615.3 million (US $78.1 million) and operating profit to decline to SEK -40.6 million ($-5.2 million), as its gross margin declines from 44 to 21 percent. Excluding an inventory item with a negative impact of SEK 58.9 million ($7.5 million), and a non-recurring item boosting operating profit by SEK 28.2 million ($3.6 million), the company estimates operating profit (EBIT) will be SEK -9.9 million ($-1.3 million). Cash flow from operations is expected to be SEK -1.7 million ($-0.2 million), and cash and equivalents will amount to SEK 920.2 million ($117.3 million).
Steps taken by Fingerprint Cards to restore growth and improve profitability include slashing 185 employees, and reducing external costs related mostly to consultants, but also to its own employees. The company expects these measures to generate savings of SEK 360 million ($45.9 million) in 2018, while restructuring costs are estimated at SEK 40 million ($5.1 million), which will be mostly reported in the first half of 2018.
Fingerprint Cards is developing new products for smartcards and multimodal fingerprint and iris solutions, in addition to capacitive sensors, according to the announcement. Its year-end report for 2017 is expected on February 9.
The company’s stock fell from SEK 16.82 ($2.14) at closing on Wednesday to SEK 12.22 ($1.56) at Thursday’s open, and had recovered to SEK 13.25 ($1.69) late in the day’s trading on the Stockholm exchange.
As previously reported, Fingerprint Cards was approached by a potential investor seeking a controlling stake in late 2017.
Article Topics
biometrics | financial report | Fingerprint Cards
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