By Zaheer Kachwala
(Reuters) -Mobileye Global forecast surprise second-quarter revenue growth on Thursday and said the company would not face a direct impact from U.S. President Donald Trump’s tariffs, sending its shares up as much as 8%.
Executives of the maker of technology for autonomous-car systems cited the “simplicity” of its supply chain where the company’s customers are the importers of its driver-assistance chips.
As a result, Israel-based Mobileye should not directly incur any material costs from the duties, they said on a post-earnings conference call.
The executives, however, cautioned that Mobileye would be hit if there is a slowdown in global vehicle production and a shift in consumer spending.
“While there is no direct impact, we, of course, will be exposed to any negative impact to vehicle production volume, driven by supply impacts related to tariff costs on vehicles and components imported to the U.S.,” finance chief Moran Shemesh said on the call.
The company expects second-quarter revenue to grow 7% from the previous year, while analysts expect it to fall around 2%, according to data compiled by LSEG. It also reaffirmed its annual revenue forecast.
The forecast helped allay investor worries that the global trade war brought on by the sweeping duties and the resulting macroeconomic volatility would make a major dent in Mobileye’s ability to sell its technology.
“Reaffirming guidance, especially in the face of a worsening macro picture, sends a clear message: ‘We’ve planned for the worst, and we’re not panicking’,” said Jeremy Goldman, senior director of briefings at Emarketer.
He added that Mobileye’s indirect exposure to tariff “pain” gives it a measure of insulation.
The company reported first-quarter revenue of $438 million, compared with estimates of $435.2 million.
Mobileye has been seeing an increase in demand for its systems as customers work through their excess inventory of auto chips they had stockpiled during the pandemic to avoid a crunch.
The company’s loss per share narrowed to 13 cents in the quarter from 27 cents a year ago.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shinjini Ganguli and Maju Samuel)
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