Audience Down 15% On Lower Chip Demand From Samsung

Audience ADNC fell more than 15 percent on a weak outlook for the second half of 2014.

The company provides audio processors for smartphones and Samsung represented 72 percent of its recent second-quarter sales.

But Samsung recently forecast substantially lower-than-expected demand for its smartphones.

"We expect a significant financial impact for our business with Samsung in the second half of this year," Chief Executive Peter Santos told analysts in a conference call.

Deutsche Bank's Brian Modoff maintained a Hold rating Friday. "Until we see customer diversity it will continue to be a struggle for the company," Modoff said in a note cutting his price target 22 percent to $9 from $7 per share.

Pressure from both low-end cell-phones and high-end Apple "could make it hard for Samsung to bounce back," Modoff said. "So where does that leave Audience?"

It leaves them in a cost-cutting mode, according to Topeka's Suji De Silva, who maintained a Buy rating Friday although he cut his price target to $10, from $15.

De Silva said the company's competitive position is strong and cost-cutting will hasten break-even results.

Audience predicted an adjusted third-quarter loss of between $0.37 and $0.43 per share, on revenue of $25 million to $28 million.

Wall Street had predicted a loss of $0.05 per share on revenue of $41.3 million.

The company's adjusted loss of $0.20 per share on revenue of $37.5 million in the second quarter compared with analysts expectation of loss of $0.12 per share on revenue of $38.5 million.

Audience closed Friday at $8.05, down 15.5 percent.

Posted In: Analyst ColorEarningsNewsGuidancePrice TargetReiterationAfter-Hours CenterAnalyst RatingsBrian ModoffDeutsche BankSuji De SilvaTopeka
We simplify the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...