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Apple supplier Dialog Semi weathers iPhone slump to hit revenue target

Reuters  |  FRANKFURT 

By Douglas Busvine

(Reuters) - designer said on Monday that it managed to hit its fourth-quarter revenue guidance despite a slump in sales at its main customer

Shares in the company jumped 4 percent as investors credited the company's resilience at a time when other suppliers have slashed or missed their targets.

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

"Dialog was one of the few suppliers not to warn, stating at the time their comfort with the guidance provided," said analysts in a note.

Around 75 percent of Dialog's business is supplying to Apple, which warned in November of slow year-end sales and on Jan. 3 issued its first sales warning in 12 years, blaming weaker sales in

Shares in suppliers have been hit as a result, with many forced to revise their guidance lower. Dialog, however, stood by its fourth-quarter revenue forecast and managed - just - to meet it.

said in November that Dialog was seeing less of an impact than other suppliers because its were used across a broad range of Apple devices and not just in iPhones.

Dialog struck a $600 million deal last October to transfer people and patents to Apple as part of a push to diversify its business.

The company says the deal will buy it time to expand into new areas such as the Internet of Things that includes connected devices like home speakers, fitness trackers or smart watches.

The deal was not expected to affect revenues in 2018, but Dialog will lose out on Apple power deals going forward. The company, which will emerge smaller after the transaction, expects Apple to account for 35-40 percent of revenues by 2022.

Dialog said its cash on hand was $678 million at the end of 2018, up $199 million year-on-year, and that it was debt-free. It will publish audited results for 2018 on March 6.

(Additional reporting by Christoph Steitz; editing by and Susan Fenton)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, January 14 2019. 18:26 IST