Investing.com -- Aixtron SE (ETR:AIXGn) shares fell more than 9% on Thursday after the semiconductor equipment manufacturer issued weaker-than-expected guidance for the first quarter and full-year 2025.
The German company’s fourth-quarter 2024 revenues came in at €226.9 million, slightly exceeding expectations.
However, gross margins fell significantly short at 45%, compared to consensus expectation of 49%.
This margin miss was attributed to an unfavorable product mix, which also contributed to a lower-than-anticipated EBIT of €71 million—8% below Jefferies’ forecast.
Despite orders exceeding estimates at €157 million, concerns remain over the company’s broader growth trajectory.
Aixtron’s guidance for the first quarter of 2025 weighed heavily on market sentiment. The company projected revenue between €90 million and €110 million, falling 15% below consensus expectations at the midpoint.
Meanwhile, full-year revenue guidance of €530 million to €600 million disappointed, implying a roughly 10% year-over-year decline.
Nearly 50% of this revenue still requires new orders, raising risks unless Aixtron demonstrates strong order momentum in early 2025.
Barclays (LON:BARC) noted that while fourth-quarter revenues exceeded consensus by 5%, gross margins missed expectations by 2 percentage points, and EBIT margin came in 4 percentage points below expectations.
Power and optoelectronics outperformed, while LED revenues underwhelmed. Power electronics accounted for approximately 45% of fourth-quarter revenue.
Orders were 6% above consensus, but the backlog declined to €289 million, the lowest level since the first quarter of 2022 and an 18% year-over-year decline.
Aixtron’s EBIT margin guidance of 18% to 22% is also about 6% below consensus estimates at the midpoint.
Despite order intake improvements, Aixtron’s backlog remains too low to achieve its 2025 sales goals, according to Morgan Stanley (NYSE:MS). With gross and EBIT margin guidance of 41-42% and 18-22% respectively, the company is vulnerable to further underperformance.
Additionally, Aixtron has cut its dividend to €0.15 per share from €0.40, citing strategic investment priorities.
Despite these challenges, the company has opened its new Innovation Centre for 300mm GaN wafers and placed pilot systems with multiple leading customers.
The company remains optimistic about future GaN opportunities in AI power delivery and EV inverters, though these are expected to materialize between 2026 and 2028.
Given weak cash flow generation in 2024 and continued market headwinds, analysts see further downside risks to Aixtron’s 2025 guidance.
However, some signs suggest the market may be nearing a bottom, with a €110 million backlog already in place for 2026—the strongest forward position in years.