Wolfson Microelectronics, which supplies chips for smartphones and tablet computers, reported a third quarter $10.1m pre-tax loss after it was hit by a combined $7m restructuring and inventory writedown charge.

Revenues improved 5% in the third quarter despite persistent weak consumer demand but fell 14% year-on-year from $47.1m in the third quarter of 2010. The $10.1m pre-tax loss compares to a $0.6m profit in the third quarter of 2010 and a $3.5m loss in the second quarter of 2011.

Wolfson, which supplies companies such as Samsung, LG, Amazon, Research In Motion, but not Apple, said order intake had stabilised after the summer following a marked slowdown in consumer demand for technology containing its products.

Chief executive Mike Hickey commented, "The sharp reductions in customers' near-term forecasts seen during the summer months have not been repeated, and order intake has stabilised, albeit at somewhat lower levels than previously anticipated."

The Edinburgh based firm, which issued two profit warnings in one month, said it is well positioned to weather the current challenging environment and improve sales growth and profitability as its target market continues to grow and as consumer spending picks up.

Wolfson said visibility for the fourth quarter and 2012 remains limited but it is confident that its high exposure to growing markets such as smartphones, tablet PCs, eBook readers and gaming leave it well positioned to weather the challenging consumer environment.


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