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IQE Sees Adj. Operating Loss, Lower-than-expected Revenues In FY19; Stock Dips

Shares of IQE plc (IQE.L) were plunging around 24 percent in the early morning trading in London after the supplier of advanced wafer products and material solutions to the semiconductor industry Monday said it now expects an adjusted operating loss with weaker-than-expected revenues in its fiscal year 2019.,

In its trading update, IQE said it now expects to deliver revenue of between 136 million pounds and 142 million pounds, compared to the previous guidance range of 140 million pounds to 160 million pounds, including a forex tailwind of circa 3 million pounds.

The company now sees a mid-single digit adjusted operating loss due mainly to lower-than-expected revenues, certain additional costs, and the inclusion of losses for the Singapore CSDC entity.

Further, the company said it expects total revenue will return to moderate growth in 2020.

The company said, "The outlook for 2020 includes a seasonally weak Q1 and continued supply chain transitions in the wireless market. Beyond Q1 2020, IQE is cautiously optimistic about a return to growth, driven by expected content gains in an expanding market for 3D sensing, demand for GaN to meet accelerating 5G infrastructure deployments and expanding Asian market opportunities for both Photonics and Wireless products as supply chains continue to localise."

In London, IQE shares were trading at 50.31 pence, down 23.60 percent.

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