Gemalto NV (GTO), the world's largest maker of smart cards, said first-quarter sales dropped 11 percent as revenue from cards used to power mobile phones continued to decline. The shares fell 4.1 percent.
Sales fell to 362.1 million euros ($491.2 million) from 406.2 million euros a year earlier, Gemalto said in a PR Newswire statement. In the mobile communications unit, which makes subscriber-identification mobiles, or SIM cards, to unlock mobile phones, revenue slipped 16 percent.
Gemplus International SA and Axalto Holding NV combined in June 2006 to cut costs and fend off competition from China. Revenue from mobile phone cards has dropped every quarter since as rivals undercut Gemalto's prices and the company shipped a larger percentage of low-end products.
Savings from the combination ``will not be sufficient to offset the adverse effect on the operating margins of the strong price decline of last year,'' Gemalto said in the statement.
The shares fell 77 cents to close at 17.86 euros in Paris, the biggest drop since March 15.
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