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The share price of Israeli advanced driving assistance systems (ADAS) company Mobileye Global Inc. (Nasdaq: MBLY) is down 27% in premarket trading on Wall Street after the company published preliminary results for the fourth quarter of 2023 and issued bleak guidance for the first quarter of 2024.
Mobileye, owned by Intel Corp. and led by CEO Prof. Amnon Shashua, missed the analysts’ expectations in the fourth quarter but the main reason for the share’s plunge is that Mobileye expects revenue to be down 50% in the first quarter of 2024 to $229 million from $458 million in the first quarter of 2023. Analysts had expected revenue of $563.7 million.
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Mobileye attributes the lower revenue expectation to “excess inventory at our customers.” The company further explained, “Based on our discussions, we understand that much of this excess inventory reflects decisions by Tier 1 customers to build inventory in the Basic ADAS category due to supply chain constraints in 2021 and 2022 and a desire to avoid part shortages, as well as lower than-expected production at certain OEM’s during 2023. As supply chain concerns have eased, we expect that our customers will use the vast majority of this excess inventory in the first quarter of the year.”
Mobileye is less gloomy about revenue expectations after the first quarter of 2024 and says, “We also currently believe that revenue over the balance of the year will be impacted by inventory drawdowns to a much lesser extent. As a result, we expect revenue for Q2 through Q4 2024 on a combined basis to be roughly flat to up mid single-digits as compared to the same period in 2023, and we expect inventory at our customers to be at normal levels by the end of 2024.”
In full year 2024, Mobileye expects revenue between $1.83-1.96 billion down from $2.59 billion in 2023.
Yesterday Mobileye’s share price fell 3.92% to $39.72, giving a market cap of $32.02 billion. Today the share price is down 27% in premarket trading.
Published by Globes, Israel business news – en.globes.co.il – on January 4, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.
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