SemiLEDs shares nosedived 16 percent Wednesday due to weaker-than-expected third quarter results and a delayed transition toward a new business model.
Revenue for the LED chipmaker was $2.4 million for its fiscal year 2016 third quarter, falling from $2.9 million the quarter before. Its adjusted net loss of $3.1 million, or $1.06 per share, grew from $2.2 million, or 77 cents a share, in the previous quarter.
The company attributed low revenues to challenges of the fabless model — the process of outsourcing silicon wafer production to other companies while focusing on design and marketing its own products.
"The transition toward the fabless business model has taken longer than we anticipated; however, we still believe it is the right model. This should help us to lower our cash needs while evaluating other potential business opportunities," said Trung Doan, the chairman, president and CEO of SemiLEDs.
SemiLEDs also forecasted even dimmer fourth quarter prospects, with an expected revenue of $2 million to 2.5 million.
LEDS year to date: