A shock profit warning has hammered shares in hi-tech chemicals company AZ Electronic Materials (AZEM). Customers dual sourcing and using less volume per silicon wafer has hit demand for AZ's high-margin dielectric materials, damaging first-quarter sales at the core microchip division. And with an improvement unlikely in the next few months, cash profit margins will be sub-30 per cent in the first half, at least 300 basis points below City forecasts. Klebosol, a colloidal silica material used to polish sapphires and smartphones lenses, hasn't lived up to expectations, either.
Given that management forecasts flat revenue and below normal margins this year, Goldman Sachs has cut earnings forecasts for 2013 by 17 per cent to 31¢ (20.4p in 2012).
