wolf speed (NYSE:Wolf) The stock price has tumbled in Thursday trading following the company's latest quarterly report. The chip specialist's stock price was down 33.2% as of 1pm ET.
After the market closed yesterday, Wolfspeed announced its first quarter results for the current fiscal year, which ended September 29th. The company posted a smaller-than-expected loss in the quarter, but its revenue and outlook fell short of Wall Street targets.
Start your morning smarter! wake up with Breakfast information Delivered to your inbox every market day. Sign up for free »
Posted by Wolfspeed Non-GAAP (Generally Accepted Accounting Principles) Adjusted loss was $0.91 per share on revenue of $194.7 million. For comparison, average Wall Street expectations were for a loss of $1 per share on revenue of roughly $200 million. Revenues decreased approximately 1.4% year-over-year in the period.
Meanwhile, the business posted a net loss of $282.2 million in the period, of which $87.1 million was due to restructuring costs related to plant closures. Management expects to incur an additional $174 million in restructuring charges this quarter and also announced that it plans to lay off approximately 20% of its workforce.
Wolfspeed expects second-quarter sales of the current fiscal year to be between $160 million and $200 million. The guidance was well below Wall Street's average target, which had called for sales of $214.6 million.
The company also expects an adjusted loss of between $0.89 and $1.14 per share. Again, this guidance was much worse than expected, with Wall Street's average target being an adjusted loss of $0.91 per share.
Wolfspeed stock is down about 79% this year, valuing the company at just 1.3 times this year's estimated sales. The company is on track to raise new funding through the CHIPS Act, and while it looks undervalued by some metrics, recent quarterly reports show the company's competitive position and long-term revenue growth. This casts doubt on the outlook for profits.
Before buying Wolfspeed stock, consider the following:
of Motley Fool Stock Advisor Our analyst team has identified what they believe Best 10 stocks Things investors should buy right now…and Wolfspeed wasn't one of them. These 10 stocks have the potential to generate impressive returns over the next few years.
