|
French company Gemplus said on Thursday it expected reduced sales and a loss between EUR30 million and EUR37 million in the third quarter.
Adjusted for divestitures made in the quarter, Gemplus saw revenues of EUR259 million and an operating loss between EUR11 million and EUR17 million the company said in a statement.
The divestitures refer to moves made by the company during the third quarter when Gemplus sold daughter companies Skidata and Tags. With these companies taken out of the equation, the loss amounts to roughly EUR14 million.
Gemplus spokeswoman Severine Percetti told ElectricNews.Net that it is not clear yet whether the company needs to take measures. "In November we will have a more complete picture," she said.
The company, one of the world's biggest providers of smart card solutions, said that there was no reason to believe that demand would pick up in the next quarter.
"In the past two weeks we have seen a rapid deterioration in our revenue prospects for the third and fourth quarter," Gemplus' president and chief executive officer Antonio Perez said. He added that, while he was quite optimistic about the mid-to-long term prospects for the GSM SIM modules, he felt the short term would be "very challenging."
Perez said that the company was also analysing the preliminary implications that recent world events would have on demand, particularly in the US market. As a result of the global economic uncertainties Gemplus has received several customer-initiated requests to delay shipments. Perez stated that he was confident that the revenue associated with the projects delayed in the third quarter would be recognised in the fourth quarter.
In 2000 Gemplus, which has an office in Ireland, was working in an industry that displayed tremendous growth. According to Gartner Dataquest statistics Gemplus was in the number position for SIM card shipments in that year with a 35 percent market share. The research firm reported worldwide SIM card shipments at 1.8 billion in 2000, an increase of 12 percent over the previous year. Smart card shipments totalled 628 million units, providing strong growth with a 45 percent increase over 1999, while memory card shipments reached 1.1 billion in 2000, a decline of 0.4 percent over the previous year.
The company's stock has dropped over the course of the year from a high of USD18.8 in January. In New York on Wednesday, Gemplus closed at USD4.4. On the back of Thursday's results, the company's shares were down almost eight percent to EUR2.55 at around 2pm in Paris.
According to the company, the economic slowdown in the US is creating a weaker dollar, which in turn is having an unfavourable effect on Gemplus. Much of the revenue that the company generates in Southeast Asia is dollar denominated.
Gemplus currently estimates that the negative impact of the currency effect is as much as EUR8 million. This amount accounts for 40 percent of the shortfall in operating profit. "Fortunately, about half of this effect will be offset by the company's hedging programme and will be reported in other income."
The Gemplus president noted that he could not predict the fourth quarter results but said the company would set targets as soon as the economic situation has stabilised.
In August the company sold its TAG subsidiary to Axa Private Equity however the terms of the agreement were not disclosed.
Gemplus has headquarters in France and provides smart card empowered solutions, such as mobile Internet access, inter-operable banking facilities and e-commerce. Gemplus employs 7,800 people in 37 countries.
Gemplus is at http://www.gemplus.com
|
