Self-driving technology firm Mobileye Global more than doubled its profit in the fourth quarter on the back of higher margins, offering some respite to investors worried about the supply glut in the market for driver-assistance chips.
The shares were 1% higher in premarket on Thursday. They have lost more than a third of their value this month after Mobileye on Jan. 4 warned a pullback in orders from customers clearing inventory would batter its results this year.
"Our fourth quarter performance was very strong across the board, but is understandably overshadowed by the inventory build-up at our customers which will impact our growth in 2024," Chief Executive Officer Amnon Shashua said.
Demand for auto chips is weakening
Demand for auto chips has been weakening in recent months as customers work through the inventories they had rapidly built up to avoid the pandemic-driven supply crunch in 2021 and 2022.
Chipmakers Texas Instruments and STMicroelectronics also gave gloomy forecasts this week, fanning fears of weakening demand in the automotive sector.
Mobileye, on Thursday, stood by its preliminary 2024 revenue forecast of between $1.83 billion and $1.96 billion.
The Israel-based firm also beat estimates for quarterly adjusted profit by one cent, but its revenue of $637 million came in below analysts' expectations of $639.8 million, according to LSEG data.
Its operating margin grew to 11.5% in the fourth quarter, compared to 4.2% in the same period in 2022.
The company, which counts Volkswagen and Porsche among its customers, also reported operating income of $73 million in the fourth quarter, up from $24 million a year earlier.