U-Blox Holding Shares Fall on Lowered 2023 Guidance

Shares in U-blox Holding, a Swiss technology company, tumbled on Friday following a downward revision of its guidance for 2023. The company cited weakness in the semiconductor market and unfavorable foreign-exchange rates as the reasons for the adjustment.

As of 0938 GMT, U-blox shares were down 17% to CHF87.38.

U-blox now expects revenue to remain flat at best for the year, with lower profitability than initially anticipated. Previously, the company had projected a rise in top-line performance ranging from 6% to 16%, whereas it now anticipates a potential drop of up to 6%.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are forecasted to range from 18% to 22%, down from the previous range of 21% to 24%.

“In a softening macroeconomic and global semiconductor market environment, our order book for the second half of 2023 developed more slowly than initially anticipated,” stated U-blox Chief Executive Stephan Zizala.

The company expects a particularly challenging third quarter due to customer adjustments resulting from overstocking. However, an improvement is predicted for the fourth quarter.

Analysts from Stifel, Michael Inauen and Juergen Wagner, noted that despite the guidance downgrade, U-blox faces additional risks if automotive customers also experience a downturn.

In the first half of the year, U-blox’s adjusted EBITDA rose to 84.0 million Swiss francs ($95.6 million) from CHF76.6 million in the same period the previous year. Revenue for the first half increased by 13% to CHF332.3 million.