Apple supplier Dialog Semi weather iPhone malaise to hit sales target

FRANKFURT (Reuters) – Chip designer Dialog Semiconductor said Monday that it managed to pass in the fourth quarter revenue guidance, despite a drop in iPhone sales in the most important customer of Apple.

FILE PHOTO: Dialog semiconductor logo is pictured at a business premises in Germering near Munich, Germany August 15, 2016. REUTERS/Michaela Rehle

Shares in the Anglo-German company, jumped 4 percent, as investors credited the company’s resilience in a time in which other Apple suppliers have wasted or missed their targets.

The shares had fallen in early trading after the Dialogue said unaudited preliminary sales came in at $431 million in the fourth quarter, the low end of the guidance range of $430 million-$470 million, but they recovered on the broader view that Dialogue had weathered Apple’s recent sales slowdown.

“Dialogue is one of the only Apple suppliers not to warn, stating the time of their comfort with the guidance,” said Barclays analysts in a note.

Approximately 75 percent of the Dialog business is the supply of power-management chips to Apple, which warned in November of the slow end of year sales and Jan. 3 issued the first sales warning in 12 years, blaming weaker iPhone sales in China.

Shares in suppliers have been hit as a result, with many forced to revise the directives of the bearing. Dialogue, however, stood by its fourth-quarter sales forecast and managed – just – to meet him.

CEO Jalal Bagherli said in November that the Dialogue was seeing less of an impact than other suppliers because the power management chips were used in a wide range of Apple devices and not only in the iphone.

Dialogue struck a $600 million deal in October of last year the transfer of people and patents from Apple as part of a push to the diversification of its activities.

The company says the deal will buy is the time to expand to new areas, such as the Internet of Things include connected devices, such as speakers, fitness trackers or smart watches.

The deal was not expected to affect sales in 2018, but the Dialog will lose on Apple power chip is going to go forward. The company, which will emerged smaller after the transaction, expects Apple to account for 35% to 40% of revenues by 2022.

Dialog said the cash was € 678 million euros at the end of 2018, an increase of $199 million, a year-on-year, and that it was debt-free. It will publish audited results for 2018 on 6 March.

Additional reporting by Christoph Steitz; editing by Riham Alkousaa and Susan Fenton

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