On February 5, Melexis, Belgium's leading semiconductor supplier, lowered its margin and sales forecast for the first half of 2025, resulting in a drop in its shares to nearly a five-year low, due to ongoing inventory adjustments by automotive clients.
In 2024, 90% of Melexis' total sales were attributed to its automotive semiconductor business, with customers including Tesla and Chinese automakers BYD and NIO.
The company anticipates a first-half operating margin of about 16%, down from 26.3% in the same period last year, with sales expected to reach around 400 million euros ($415.4 million), a decrease from 487.5 million euros in the previous year. First-quarter sales are projected to fall in the range of 190 million to 200 million euros.
While acknowledging ongoing customer inventory adjustments in the first half, Melexis expressed tempered optimism that customer demand would begin to rebound around the summer months.
Melexis' shares plummeted by 14.7% to 52.65 euros in early trading, the lowest level since mid-May 2020, and were down 10% as of 0842 GMT, ranking at the bottom of Brussels' main index BEL20.
The company refrained from offering detailed guidance on full-year sales or earnings but anticipates a significant uptick in sales in the latter part of 2025. Analyst Michael Roeg from Degroof Petercam noted that Melexis' results and projections fell well below market expectations, emphasizing that investors would scrutinize the management's confidence in the anticipated second-half upturn during the upcoming post-earnings call at 0930 GMT.
In the fourth quarter, Melexis recorded an operating margin of 14.0% on sales of 197.4 million euros, falling short of analysts' expectations of an 18.6% margin on sales of 205.4 million euros, as per a company-conducted poll.
Moreover, Melexis disclosed plans to allocate approximately 50 million euros towards capital expenditures in 2025, a decrease from 60.6 million euros in the prior year and 94.8 million euros in 2023.
(1 euro equals 0.9629 dollars)