CML Microsystems, whose semiconductors are used in police and military radios, has lost around a fifth of its value after communicating bad news to the City.
The company said full year profits had climbed 6% to £5.79m, but warned of a slowdown in the second half which would continue into the current year.
CML told analysts they were confident this was just a short term blip, due to one of its storage customers leaving the market as well as weaker demand for some of its wireless products. It said it was "confident of delivering a return to revenue growth" with new design wins and contracts. Future deals including supplying chips for US military radios as well as for a tsunami early warning system in Japan.
Analysts at Cenkos cut their revenue forecast for the year from £27.1m to £21m, down from £24.4m in 2013, following the cautious outlook. They said:
While gross margins were ahead of expectations, after a challenging second half for both storage and wireless, management is expressing short- term revenue caution which will impact market expectations for 2015.
CML's shares have fallen 22% or 120p to 417.5p.
