Mobileye Global, a maker of technology for advanced driver-assistance systems and self-driving cars, on Thursday warned that 2024 sales will be below estimates because of excess inventory at its customers. MBLY stock crashed on the news.
The Israel-based company released preliminary fourth-quarter results and 2024 guidance before the market open.
On the stock market today, MBLY stock plummeted 24.6% to close at 29.97.
Mobileye's majority owner Intel saw its shares drop 0.4% to 46.87 on Thursday.
The news also dragged down other semiconductor stocks exposed to the automotive sector. Analog Devices, NXP Semiconductors, Onsemi, STMicroelectronics and Texas Instruments fell in sympathy.
MBLY Stock News: Disappointing Outlook
Mobileye's preliminary results for Q4 were in line or better than than its guidance. However, its sales and earnings guidance for 2024 disappointed.
For the full year ahead, Mobileye expects revenue of $1.83 billion to $1.96 billion. The midpoint of $1.9 billion is well below the consensus estimate of $2.56 billion, according to FactSet.
"We have become aware of excess inventory at our customers," Mobileye said in a news release. "We expect that our customers will use the vast majority of this excess inventory in the first quarter of the year."
Mobileye said its Tier 1 customers built inventory for advanced driver-assistance systems, or ADAS, to avoid the supply chain constraints and parts shortages they experienced in 2021 and 2022. Also, certain automakers had lower-than-expected production in 2023, Mobileye said.
Mobileye expects Q1 revenue to be down about 50% from the same period last year.
The excess inventory and resulting slowdown in sales also will negatively impact the company's adjusted operating income.
MBLY stock ranks ninth out of 38 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup.
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