Fingerprint Cards: Snap!(dragon)

Research Update

2017-07-24

07:30

Q2 EBIT was a weak SEK 72 million (exp. SEKm 219) as we expected a sales drop of -40 percent while the outcome was -51 percent. The adjusted gross margin fell to 42 percent, worse than we and consensus expected, and therefore needs to be closely monitored ahead. Inventory normalized by declining SEK 229 million from Q1. Operating cash flow reached SEK 528 million. Besides that we believe the relief rally for the FPC shares was related to the Qualcomm Snapdragon deal where FPC 1028 will be pre-integrated in six mobile platforms. At the moment these platforms employ 235 models. We keep our reasonably pessimistic scenario of SEK 22 per share but we have lowered our base case to SEK 52 (58) related especially to the slower TAM trajectory and the weak Q2 gross margins.

VW

Viktor Westman

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