Shares of Wolfspeed Inc. (WOLF) tumbled 5.19% in after-hours trading on Thursday following the release of the company's disappointing third-quarter financial results. The semiconductor manufacturer, known for its silicon carbide and gallium nitride technologies, failed to meet revenue expectations and reported weak margins, leading to investor concerns about its near-term prospects.
Wolfspeed reported Q3 revenue of $185.4 million, falling short of the IBES estimate of $185.9 million. This represents a 7.62% decrease compared to the same period last year when the company posted sales of $200.70 million. Despite the revenue miss, Wolfspeed's adjusted earnings per share (EPS) of $(0.72) beat analyst consensus estimates of $(0.77), showing a slight improvement in cost management.
However, investors seemed more focused on the company's profitability challenges. Wolfspeed's adjusted gross margin for the quarter stood at a mere 2%, indicating significant pressure on the company's ability to generate profits from its sales. Moreover, the company reported a staggering net loss of $285.5 million for the quarter, highlighting the ongoing struggles in its operations. These factors, combined with the revenue decline, likely contributed to the sharp after-hours sell-off as investors reassess Wolfspeed's growth trajectory and path to profitability in the competitive semiconductor market.
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