Apple supplier Laird's profit warning sparks share sell-off

A supplier of components to smartphone makers Samsung and Apple (NasdaqGS: AAPL - news) , UK-based Laird (Other OTC: LARRF - news) , has endured a sharp sell-off in its share price after issuing guidance on profits.

The company, which trades on the FTSE 250 and recently lost its chief executive to Cobham (Other OTC: CBHMF - news) , warned underlying pre-tax profits would be about 30% down on last year.

Its shares plunged 49%.

Laird, which specialises in connectivity and electronic component protection solutions, blamed slower mobile device production growth and a lack of clarity on future orders for the new guidance.

Its third-quarter trading statement said: "The acceleration of production for mobile devices has come much later than in previous cycles and visibility on volumes remains poor.

"In addition, we have experienced increased margin pressure due to unprecedented pricing pressures and some operational factors.

"This has led to a very challenging trading performance in PM (performance materials) in Q3 and we now anticipate full year group underlying profit before tax to be around £50m.

"Management are taking actions to stabilise and improve the financial performance of the PM division with a considerable focus on managing costs and cash across the Group.

Its warning follows the well-documented troubles for Samsung, which scrapped its flagship Galaxy Note 7 smartphone after failing to overcome problems with exploding batteries.

Apple reported a 15% drop in iPhone sales in July.

Tony Quinlan, who took over as chief executive at Laird last month, said: "We are very disappointed by these adverse developments in the mobile devices market for our Performance Materials division, at a time when other parts of the business continue to perform well.

"We are confident that the actions we have taken will stabilise and improve the business."