Wolf speed (NYSE: WOLF) The stock is crashing in Thursday trading following the company’s recent quarterly report. The chip specialist’s stock price fell 33.2% as of 1:00 PM ET.
After the market closed yesterday, Wolfspeed published results for the first quarter of the current fiscal year, which ended on September 29. Although the company posted a smaller-than-expected loss in the quarter, sales and future expectations fell short of Wall Street targets. .
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Wolfspeed reported a non-GAAP (generally accepted accounting principles) adjusted loss of $0.91 per share on revenue of $194.7 million. By comparison, the average Wall Street estimate had forecast a loss of $1 per share on revenue of about $200.4 million. Sales for the period fell by approximately 1.4% year on year.
Meanwhile, the company posted a net loss of $282.2 million in the period, of which $87.1 million came from restructuring costs related to a plant closure. Management expects an additional $174 million in restructuring costs in the current quarter and also announced that the company expects to lay off approximately 20% of its workforce.
For the second quarter of the current fiscal year, Wolfspeed expects revenue to be between $160 million and $200 million. This expectation was well below the average Wall Street target, which had projected revenue of $214.6 million.
The company also expects an adjusted loss between $0.89 per share and $1.14 per share. Once again, these expectations turned out much worse than expected: the average Wall Street target resulted in an adjusted loss of $0.91 per share.
Wolfspeed shares are now down about 79% in this year’s trading, and the company is now valued at just 1.3 times this year’s expected revenue. While it is on track to receive new funding through the CHIPS Act and appears cheaply valued by some measures, the company’s competitive position and longer-term sales and earnings prospects are in question following its recent quarterly report.
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