SiliCom Warns of Slowdown, Reports Lower Profit


SiliCom, a provider of networking and data infrastructure solutions, has issued a warning of a slowdown in the third quarter and announced a decrease in its prior quarter profit. As a result, shares of the company have fallen by 23% in premarket trade, reaching $29.88. This year alone, the stock has declined by approximately 7.4%.

The inventory drawdown by SiliCom’s customers, stemming from a previous shortage in components, has had a significant impact on the company’s revenue expectations for 2023. These adverse effects may also extend to its first-half results in 2024, according to Liron Eizenman, President and Chief Executive of SiliCom.

For the third quarter, SiliCom expects revenue between $30 million and $31 million. This reflects a decrease from the reported revenue of $39.2 million in the same period last year and falls short of analysts’ expectations of $44.1 million, as reported by FactSet.

In addition to the warning, SiliCom disclosed a decline in second-quarter profit. The company’s profit for this period dropped to $3.8 million, or 56 cents a share, compared to $4.5 million, or 67 cents a share, in the previous year.

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