Ams Osram Shares Slide After Q2 Revenues Decline

By Scott Kanowsky 

Investing.com -- Ams Osram (SIX:AMS) shares slumped to near the bottom of Europe's STOXX 600 on Friday, after second quarter revenues at the Austrian semiconductor maker were dragged lower by the disposal of its automotive lighting systems unit and COVID-related supply chain delays.

Group-wide sales during the period fell by 5% to 1.83B euros, the company said, citing effects from the removal of AMLS at the beginning of July. The move had been planned since Osram and German auto parts manufacturer Continental put an end in 2020 to the joint venture that originally formed the business.

Meanwhile, adjusted earnings before interest and taxes margin came in at 8.8%. Both revenues and margin were within company expectations published in the first quarter.

However, ams Osram - which makes light sensors for everything from automobiles to mobile devices - warned that its key chipmaking segment faces a "constrained" market environment. It added that supply chain disruptions partly stemming from strict COVID lockdowns in Asia and seasonal effects weighed heavily on smartphone demand, leading to lower shipments.

Looking ahead, the company now expects revenues in the third quarter at between 1.15B euros -1.25B euros, while its adjusted operating income margin during the period is seen at 6% - 9%.

"Expectations for the third quarter reflect a more demanding situation in key end markets and a more unfavorable macro-economic environment including expected inventory adjustments in the industry, amongst others driving overall reduced automotive production volumes and lower total smartphone volumes year-on-year," ams Osram said in a statement.

The Premstätten, Austria-based firm said it would pursue "cost mitigation measures" to address these challenges.