Shares of the Swiss digital broadcast technology group, Kudelski, plummeted by nearly 36 per cent in Friday trading.This content was published on August 30, 2002 - 17:50
Investors deserted the stock after the company issued a profit warning and slashed its forecast for 2002 by about SFr100 million ($67 million).
By market close on Friday the shares had dropped 35.5 per cent and were trading at SFr26.75 ($17.82), a slight recovery from the daily low of SFr22.50.
Speaking in a conference call, the executive chairman, Andre Kudelski, said he had had to reduce his sales forecast for 2002 by SFr250 million as clients deferred orders for smart cards and television access systems.
He now expects a first-half loss of SFr20 million and a full-year net profit of SFr5 to SFr20 million. The company had earlier said profits would be around SFr120 million.
However, there was also a risk that Kudelski, based near Lausanne, might have to increase provisions or take restructuring charges leading to a loss in 2002.
"We are also cautious about 2003, but we need a few more weeks before we can give fresh indications," Kudelski said.
The market consensus for 2002 had been a net profit of around SFr120 million and where forecast to rise by SFr30 million in 2003.
"The market had been expecting a profit warning, but certainly not of this magnitude," said Martin Schmidt, a financial analyst at Bank Leu.
"People will be very disappointed and ask themselves why Kudelski has stuck to his previous forecast for so long," Schmidt added.
Kudelski supplies security installations to broadcasters, and makes smart cards that slide into cable and satellite decoders and unscramble programming for subscribers.
swissinfo with agencies
Kudelski's shares dropped by nearly 36 per cent.
The company cut its profit forecast by SFr100 million.
Kudelski expects a first-half loss of SFr20 million.
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