Mobileye Global Reports Strong Q4 Profits Amidst Supply Concerns
Mobileye Global, a leading force in self-driving technology, has announced a notable surge in profits during the fourth quarter, primarily attributed to improved margins. This positive development offers a respite for investors anxious about a surplus of driver-assistance chips in the market.
In premarket trading on Thursday, the company’s shares demonstrated a 1% uptick, signaling a modest recovery from a more than 30% downturn earlier in the month. This decline followed a cautionary statement on January 4th from Mobileye concerning a reduction in customer orders, linked to inventory clearance and its potential impact on 2024 results.
Despite these challenges, CEO Amnon Shashua emphasized the robust performance in the fourth quarter. He acknowledged the overshadowing influence of inventory build-up at customer sites on the company’s growth in 2024.
The overall demand for auto chips has experienced a recent downturn as customers manage inventories built up to navigate the supply challenges induced by the pandemic in 2021 and 2022. This trend extends beyond Mobileye, with chipmakers such as Texas Instruments and STMicroelectronics issuing cautious forecasts, sparking concerns about diminishing demand in the automotive sector.
Mobileye has held firm to its preliminary 2024 revenue forecast, anticipating a range between $1.83 billion and $1.96 billion. While the company slightly exceeded estimates for quarterly adjusted profit by one cent, its revenue of $637 million fell short of analysts’ expectations of $639.8 million, according to LSEG data.
A notable highlight is Mobileye’s operating margin, which soared to 11.5% in the fourth quarter, marking a substantial improvement from the 4.2% reported in the same period in 2022. With customers including Volkswagen and Porsche, the company also disclosed an operating income of $73 million for the fourth quarter, a significant upswing from $24 million a year earlier.
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