Chipmaker Wolfspeed, listed as NYSE:WOLF, experienced a sharp decline of over 4% in extended trading on Wednesday following its disappointing revenue guidance for the current quarter.
After hours, WOLF stock plummeted by 4.1% to $31.20.
Wolfspeed reported a loss per share for FQ2 2024 of $1 on revenue of $208.4M, missing analysts’ expectations of a loss per share of 63 cents on sales of $206.41M.
Durham, N.C.-based Wolfspeed specializes in silicon carbide (SiC) chips, which can operate at higher voltages and temperatures compared to traditional silicon-based chips, and are utilised in electric vehicles (EVs).
The company’s revenue outlook for FQ3 predicts a range of $185M to $215M from continuing operations, falling short of the consensus estimate of $223.84M. This guidance reflects a slowdown in demand and sales growth for EVs.
On a positive note, Wolfspeed’s FQ2 saw the company securing a record $2.9B in design-wins, predominantly within the EV sector across various OEMs.
Commenting on the record design-wins, Wolfspeed CEO Gregg Lowe expressed strong confidence in the EV sector, stating, “This solidifies our confidence in the electrification trend, which increasingly depends on the widespread adoption of silicon carbide technology.”
Furthermore, Wolfspeed reported that its Mohawk Valley factory, operational since the end of fiscal 2023, contributed $12M in revenue during the quarter, with sales tripling sequentially.
The company acknowledged that it would continue to face significant factory start-up costs associated with its ongoing facility expansions and enhancements.
“For the third quarter of fiscal 2024, operating expenses are expected to include approximately $13M of factory start-up costs primarily in connection with materials expansion efforts,” according to Wolfspeed.
“Cost of revenue, net, is expected to include approximately $36M of underutilization costs primarily in connection with the Mohawk Valley Fab,” the firm added.