AXT cuts Q4/2018 revenue guidance from $26.5-27.5m to $22-22.4m after caution-induced order slowdown

For its fourth-quarter 2018 results (to be announced on 20 February), AXT Inc of Fremont, CA, USA – which makes gallium arsenide (GaAs), indium phosphide (InP) and germanium (Ge) substrates and raw materials in Beijing, China – has reduced its revenue expectation from previous guidance of $26.5-27.5m (provided on 31 October) to $22-22.4m (down from $26.3m in Q4/2017).

“AXT saw a significant slowdown during the last two months of the quarter,” says CEO Morris Young. “The business climate grew increasingly cautious over the quarter and customers generally did not follow through with the level of orders they had previously forecasted. As a result, revenue for all our product lines came in below our expectations,” he adds.

“We remain optimistic about the many drivers for our business growth, including data-center connectivity, PON [passive optical networks], LED lighting, 3D sensing, 5G wireless, among others,” Young continues. “Our new manufacturing facilities, technological proficiency and efficient cost-structure position us well to benefit when the demand environment strengthens,” he believes.

AXT also says that one of its partially owned supply chain companies was required to temporarily shut down during Q4/2018 to install manufacturing improvements mandated by a regional environmental agency. Under the equity method of accounting, the firm will incur a charge of $1.1m, which represents AXT’s 25% ownership of the joint venture. The supply chain company resumed production and operations later in Q4.

See related items:

AXT grows revenue an above-expected 5.5% in Q3

AXT’s revenue grows 11% in Q2

AXT’s Q1 revenue falls 7.2% after China government-ordered factory shutdown days

AXT’s Q4/2017 revenue grows a more-than-expected 30% year-on-year, driven by InP and Ge

Tags: AXT GaAs substrate InP Germanium

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