“Despite the dip in revenues, FPC’s update said its cost savings efforts, which will affect employees and consultants, should save the company roughly SEK 360 million during 2018…”
Fingerprint Cards is predicting lower than anticipated earnings for its fourth quarter, and has laid off 185 employees as part of a cost reduction program.
The announcement comes ahead of the February 9th publication date for FPC’s year-end report for 2017. FPC predicts an EBIT operating cost for the quarter of SEK 9.9 million, reflecting a 62 percent decline in revenues compared to the same quarter a year ago. It also anticipates that FPC’s gross margin will drop to 21 percent.
Authored by Chief Financial Officer Hassan Tabrizi, the company’s revised fiscal guidance asserts that “[r]evenues have been impacted by a weak market development and a continued negative price development in capacitive sensors.”
The change in forecast echoes FPC’s revised revenue guidance for 2017 announced last March, in which the company cited “short-term challenges” that would cause revenues to drop by over 50 percent in the first quarter. At the time, FPC suggested these challenges, which revolved around lower demand from OEM customers and a supply chain glut, would ease up in Q2 of 2017. In its latest forecast, FPC offered no explanation for its expected drop in revenues; but its Q3 report spoke of “a cautious market” that was still deliberating over how to respond to the launch of the iPhone X, which abandoned fingerprint recognition in favor of infrared face scanning for user authentication.
Despite the dip in revenues, FPC’s update said its cost savings efforts, which will affect employees and consultants, should save the company roughly SEK 360 million during 2018, though it will also undergo restructuring costs amounting to about SEK 40 million, mostly during the first half of the year. The company’s report concluded with a strong emphasis on its activities in the emerging biometric smart cards market and in offering multimodal biometric solutions incorporating both fingerprint and iris recognition.
January 25, 2018 – by Alex Perala