Margin Concern Takes Spark Out Of Filtronic
February 5, 2001
Mobile phone components maker Filtronic recently forecast margin pressure in the second half, offsetting earlier market optimism over news it would run its loss-making semiconductors unit as a separate business. Filtronic Plc shares initially rose as much as 11.8% to 422 pence, but then lost their earlier gains to trade down by 2-1/2 pence to 375p by 1200 GMT, as analysts expressed concern over the group's margins. Filtronic, whose main competitor in producing components for mobile handsets is Swedish firm Allgon, said there would "likely be some reduction in operating margins" for the second half while it introduced new products. The company announced the review of its semiconductors unit as it reported first-half results broadly in line with market forecasts. Filtronic posted a first-half pre-tax loss of 1.5 million pounds ($2.19 million), the same as the year-ago figure. The company also said it would keep its interim dividend at 0.90 pence per share.