Mobileye Global Inc. shares fell. in pre-market action on Thursday after the company, which makes self-driving technology, issued a revenue warning as its customers deal with excess inventory.
It said it expects first-quarter revenue to decline by about 50% from the $458 million it reported in the same period a year earlier. Analysts tracked by FactSet had expected revenue to rise to $557 million for the period.
The company revealed in a press release that it “became aware of excess inventory held by our customers,” representing an estimated 6 to 7 million units of the company's EyeQ product. “As supply chain concerns ease, we expect our customers to use the vast majority of this excess inventory in the first quarter of the year,” Mobileye said.
Shares fell more than 25% in premarket activity. Intel stock INTC,
It was off about 4%. The chip giant spun out Mobileye through a 2022 IPO but still owns about 88% of Mobileye's outstanding shares as of the end of September 2023.
The company warned that the volume shortage could impact profits as well. “Similar to revenue, we expect first-quarter profit levels to be significantly lower than subsequent quarters,” Mobileye said, forecasting a first-quarter operating loss of $242 million to $257 million.
Mobileye noted that the issue of excess customer inventory could impact revenue “to a much lesser extent” in the balance of 2024. “As a result, we expect Q2 through Q4 2024 revenues on a combined basis to be roughly flat through mid-year.” The company said that the inventory at our customers will be at normal levels by the end of 2024.
Its full-year forecast calls for revenue of $1.83 billion to $1.96 billion, while analysts had expected $2.56 billion.