Bloomberg News

Wolfson Gains on Samsung Smartphone Audio Supply: London Mover

June 26, 2012

Wolfson Microelectronics Plc (WLF), a U.K. semiconductor maker, rose to the highest price in more than three months after saying its Audio Hub technology is being used in Samsung Electronics Co.’s latest Galaxy smartphone.

The shares gained 5.3 percent to 200 pence, the highest since March 9, extending their advance this year to 53 percent. Wolfson, based in Edinburgh, was the best performer in the FTSE All-Share Technology Index (FTSEIT) of 28 companies.

Sales of the Galaxy S III, a rival to Apple Inc.’s (AAPL:US) iPhone, are set to surpass 10 million units in July, according to Samsung, the world’s largest handset maker. The smartphone, which went on sale in 28 countries on May 29, probably will sell faster than previous models, J.K. Shin, head of the Suwon, South Korea-based company’s mobile-phone business, said yesterday.

Wolfson has supplied its Audio Hub technology for previous Samsung (005930) phones, including the Wave and Galaxy S. The new phone is using Wolfson’s ultra-low power hub, which extends battery life, the Scottish company said in a statement today. Audio Hub enhances voice-call quality and sound for music and video.

Nick James, an analyst at Numis Securities Ltd., upgraded Wolfson to buy from hold today and raised his 12-month price target to 250 pence from 190 pence. “The strong performance so far of Galaxy S3 increases our conviction that consensus estimates are too low,” he said in a note to clients.

Wolfson’s full-year revenue is set to increase 14 percent to $178.7 million, according to the average estimate of nine analysts surveyed by Bloomberg. James estimates sales of $210 million and adjusted earnings of 10 cents a share. The average EPS estimate is 1.5 cents.

Wolfson is rebounding after its stock fell 55 percent last year as customers delayed orders on slowing consumer demand.

To contact the reporter on this story: Peter Woodifield in Edinburgh at pwoodifield@bloomberg.net.


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