(Reuters) – Chipmaker Wolfspeed on Monday projected a smaller-than-anticipated loss for the second quarter, as it anticipates a boost to its business from increased production at its newly established factory in New York. This announcement caused its shares to rise by 8% in extended trading.
The positive forecast indicates that Wolfspeed is on track to meet or surpass its production and revenue targets at its Mohawk Valley plant in New York. The company has been relying on the success of this plant to enhance its results in the upcoming quarters, despite several delays in its establishment.
Gregg Lowe, CEO of Wolfspeed, stated that the company’s new facility in New York is on schedule to achieve its goal of 20% utilization. This will assist in controlling costs for the company.
The facility began generating revenue by the end of the fiscal year 2023, contributing $4 million to the third-quarter revenue. Analysts at Piper Sandler had initially projected a contribution of about $3 million.
Wolfspeed, a supplier to the U.S. government, expects an adjusted loss per share in the range of 56 cents and 70 cents for the second quarter. This differs from analyst predictions of a loss of 69 cents per share, as reported by LSEG data.
The company specializes in manufacturing silicon carbide chips, which are essential for expanding the range of electric vehicles.
Wolfspeed also anticipates second-quarter revenue from ongoing operations to be between $192 million and $222 million. The average analyst expectation for revenue was $220.2 million.
Compared to the previous year, net loss has increased from 21 cents per share to $3.22 per share.
The quarterly revenue amounts to $197.4 million, falling short of the analysts’ forecast of $207.7 million.
(Reporting by Zaheer Kachwala and Chavi Mehta in Bengaluru; Editing by Anil D’Silva)
