Mobileye, a leading developer of advanced driver-assistance systems (ADAS) and autonomous driving technologies, recently released its third-quarter financial results for 2024. The company, which was spun off from Intel, saw its revenue exceed market expectations, driven by a gradual recovery in customer inventory levels. This positive outlook for 2025 led to a significant surge in Mobileye’s stock price, which rose nearly 10% on the day of the earnings announcement.
Mobileye, a leading developer of advanced driver-assistance systems (ADAS) and autonomous driving technologies, recently released its third-quarter financial results for 2024. The company, which was spun off from Intel, saw its revenue exceed market expectations, driven by a gradual recovery in customer inventory levels. This positive outlook for 2025 led to a significant surge in Mobileye’s stock price, which rose nearly 10% on the day of the earnings announcement.
Key Financial Highlights:
– Revenue: Mobileye reported third-quarter revenue of $486 million, surpassing the $472.1 million expected by analysts surveyed by LSEG. However, this figure represents an 8% year-over-year decline, primarily due to a 9% drop in sales of its flagship EyeQ chips.
– Net Loss: The company posted a net loss of $2.72 billion, largely attributed to a $2.695 billion goodwill impairment charge related to Intel’s 2017 acquisition of Mobileye and its 2022 IPO. This compares to a net profit of $17 million in the same period last year.
– Adjusted Earnings Per Share (EPS): Adjusted EPS came in at $0.10, in line with analyst expectations.
– Operating Margin: The operating margin plummeted to -578%, a significant drop from 2% in the previous year, due to the substantial goodwill impairment. Operating loss stood at $2.8 billion, compared to a profit of $8 million in the prior year.
Business Outlook:
Mobileye noted that the automotive industry is gradually moving past the over-supply situation experienced in the first half of the year. The company anticipates a more pronounced recovery in market demand in 2025, which should drive its business performance upwards. However, Mobileye also warned that the trend of Chinese automakers shifting towards domestic chip production could continue to impact its business, with potential order cuts from Chinese clients persisting through 2025.
Guidance:
– EyeQ Chip Shipments: Mobileye maintained its previous forecast for 2024 EyeQ chip shipments, expecting between 28.4 million and 28.8 million units.
– Full-Year Revenue: The company revised its full-year revenue guidance to between $1.62 billion and $1.66 billion, slightly narrowing the range from the previous forecast of $1.6 billion to $1.68 billion. Analysts had expected revenue to be around $1.65 billion.
Stock Performance:
Despite the positive earnings report, Mobileye’s stock has had a challenging year. On October 31, the stock surged 9.58% to close at $13.61, but it remains down 68.58% year-to-date.
Conclusion:
Mobileye’s third-quarter results reflect the ongoing challenges in the automotive industry, particularly in the context of global supply chain issues and the shift towards domestic chip production in China. However, the company’s optimistic outlook for 2025, driven by anticipated improvements in market demand, has provided a boost to investor confidence, as evidenced by the recent stock price rally.