Wolfspeed Inc is set to surge more than 15% when US markets open on Tuesday after the Nasdaq-listed semiconductor designer and manufacturer outperformed in the first quarter.
Though the mid cap posted losses, they weren’t as bad as the Street expected, with consolidated revenues coming in a $197.4 million compared to $189.4 million in the first quarter of 2022.
Costs, however, ramped up, causing gross margins to contract from 36% to just 13%, with total operating losses coming in at $94.9 million.
On an adjusted basis, losses per share came to $0.53 per share, outperforming projected losses of between $0.60 and $0.75.
Despite the losses, customer orders appeared buoyant, with Wolfspeed penning the highest third quarter of design wins ever and a record quarter of design wins worth $1 billion.
For the second quarter, net losses from continuing operations are targeted between $131 million to $153 million, or $1.04 to $1.22 per diluted share.
Going by chief executive Gregg Lowe’s comments, Wolfspeed is taking these losses on the chin in hopes of a long-term payoff.
He stated: “We remain steadfast in our long-term vision for the future of this industry. The market opportunity for silicon carbide stands at $6 billion today, up from $400 million just five years ago.
"This further validates our strategy to invest now to capitalize on the immense opportunities at-hand, and the significant opportunity in the future.”