XP Power Ltd Reports 20% Drop in Q3 Revenue amid FX Issues

XP Power Limited sees a significant revenue decline of 20% in Q3. However, a 9% rise in order intake offers a glimmer of hope, particularly in the Semiconductor sector. The report highlights ongoing challenges but maintains that full-year expectations align with analyst predictions.

Date: 08-10-2024

AI Rating: 5

XP Power Limited's recently reported financials present a mixed outlook for investors. The key points from the report include:

Revenue Growth: The company's revenue for the third quarter saw a significant decline of approximately 20%, falling to 60.2 million pounds from the previous year. This decline is largely attributed to foreign exchange movements that lowered the sterling value of its predominantly US dollar-denominated sales.
Order Intake: In contrast to the revenue decline, order intake for the third quarter increased by 9% year-over-year to 48.8 million pounds. This growth in order intake is largely driven by the Semiconductor Manufacturing Equipment sector, indicating strong demand in specific areas despite overall revenue pressure.
Sector Performance: While the Semiconductor sector showed promising order improvement, the Healthcare and Industrial Technology sectors faced stagnation, with order intake remaining similar to the second quarter. This suggests ongoing challenges and customer destocking potentially affecting future revenues.
Future Expectations: Full-year expectations remain consistent with what analysts have forecasted, with adjusted operating profit anticipated to be between 27.4 million pounds and 30.1 million pounds, indicating a stabilized outlook despite current challenges.

In summary, while XP Power's revenue has suffered a notable decline, the increase in order intake and stable full-year expectations may offer a more positive perspective for investors looking for potential recovery indicators in the Semiconductor sector. However, the prolonged customer destocking in other sectors could weigh on future performance.

Stocks: XPP.L