Dialog still winning Apple deals

By BLOOMBERG

LONDON • Dialog Semiconductor plc said it’s picking up business from Apple Inc, as the British chipmaker continues to diversify.

Dialog currently has cash and cash equivalents of US$690 million (RM2.86 billion) on its balance sheet, after signing a US$600 million deal with Apple in October to license Dialog’s power management technology and acquire certain assets, including more than 300 staff.

“We have a pile of cash, and part of it will be used to fund acquisitions,” Jalal Bagherli, CEO of Dialog, said in an interview with Bloomberg yesterday.

The CEO reiterated that any deals would be small to medium in size, and likely focused on smart, connected devices.

Last year, Dialog called off merger talks with Synaptics Inc.

Despite the loss of a power management contract, Dialog has been awarded new business from Apple for the development and supply of other mixed-signal integrated circuits, the revenue of which will be generated over the course of the next three years.

The British chipmaker flagged in March that it expected its 2019 underlying revenue to decline by single-digit percentage points, and that its first-quarter (1Q) sales would come in at US$295 million, points that it confirmed in its latest results statement yesterday.

For the 2Q, underlying revenue is expected in the range of US$293 million to US$333 million.

The 1Q adjusted operating profit came in at US$47.2 million, above estimates of US$44.4 million.

Dialog said it will begin a new share buyback programme following the end of the current plan.

Bagherli said he did not expect the new programme to be of a smaller size.

Dialog has also won deals with Huawei Technologies Co Ltd, with Dialog supplying technology for the Chinese company’s wireless headphones.

However, Dialog’s automotive and industrial business was down 46% year-on-year, driven by lower demand.

Shares in Dialog rose just under 1% in early trading London yesterday, and are up more than 52% in 2019. — Bloomberg