Despite 2024 worries, Mobileye's Q4 success points to resilient future
Despite 2024 worries, Mobileye's Q4 success points to resilient future
In the fourth quarter of 2023, revenues grew by 13% compared to the corresponding quarter, reaching $637 million. However the company anticipates a 50% drop in revenues to $230 million in Q1 of 2024 due to the supply glut in the market for driver-assistance chips
Self-driving technology firm Mobileye more than doubled its profit in the fourth quarter on the back of higher margins, offering some respite to investors worried about the supply glut in the market for driver-assistance chips.
Mobileye shares have lost more than a third of their value this month after Mobileye on January 4 warned a pullback in orders from customers clearing inventory would batter its results this year.
"Our fourth quarter performance was very strong across the board, but is understandably overshadowed by the inventory build-up at our customers which will impact our growth in 2024," Chief Executive Officer Amnon Shashua said.
In the fourth quarter of 2023, revenues grew by 13% compared to the corresponding quarter, reaching $637 million. Mobileye reported an operating profit of $73 million, reflecting an operating profit margin of 11.5%—a threefold improvement compared to the same quarter the previous year. The cash flow amounted to $394 million, leaving Mobileye with $1.2 billion in cash.
For the entire year of 2023, Mobileye's revenues reached $2 billion, showing an 11% growth rate. However, the annual profitability picture is less encouraging, with an operating loss of $33 million, similar to the operating loss in 2022.
In the first quarter of 2024, the company anticipates a 50% drop in revenues to $230 million. The forecast for 2024 suggests that Mobileye's revenues will range between $1.83 billion and $1.96 billion, with an operating loss projected to be between $468 million and $378 million.
Despite the improvement recorded in operating profitability in the last quarter of 2023, Mobileye expects a significant slowdown in orders in the current quarter due to inventory accumulation among its customers.
“We believe we have high visibility to the first quarter results, a very meaningful improvement in Q2 revenue and normalization of revenue in the second half of 2024, and are focused on executing that,” said Shashua.
Demand for auto chips has been weakening in recent months as customers work through the inventories they had rapidly built up to avoid the pandemic-driven supply crunch in 2021 and 2022.
Chipmakers Texas Instruments and STMicroelectronics also gave gloomy forecasts this week, fanning fears of weakening demand in the automotive sector.
Reuters contributed to this report
