View all newsletters
Receive our newsletter – data, insights and analysis delivered to you

Gemalto share price falls yet again as SIM business falters

What course of action will Gemalto take to regain stability in years to come?

By Tom Ball

International digital security company, Gemalto, has suffered a second fall in share price this year, this time dropping by over 16 percent.

The continued instability has resulted in the issuance of three profit warnings spanning the last four months, indicative of increasing turbulence.

In the most recent warning, delivered on Friday, Gemalto outlined its struggling removable sim business as the reason for a 420 million euro reduction in the estimated asset value. The technology has lost ground in the market to more advanced processes.

In the second quarter Gemalto has warned a revenue fall that would drag it down to 742 million euros; this comparison is based on the figures of the same in the previous year.

Forecasts are not looking any brighter either, as the company’s payments business in the US is also contributing to adverse financial results. In light of this, Gemalto has predicted continued a continued decline for the remainder of the year.

Gemalto share price falls yet again as SIM business falters

Losses in these areas have been a significant blow for the company, despite having branched out into providing security software.

Content from our partners
Signs your accounting software is no longer fit for your growing business
Incumbent banks must transform at speed, or miss the benefits of open banking
Leverage cloud and expertise to optimise engagements from onboarding to conclusion

There have been major movements within the payments space recently, with the $10 billion purchase of UK leader WorldPay, being carried out by Vantiv, a US firm. Due to this, takeover speculation may also be to blame for the languid stock market performance.

READ MORE: Vantiv pays $10bn for UK payments firm Worldpay

Despite the bleak outlook for the year ahead, Gemalto managed to place on par with its first half profit expectations at 93 million euros.

Other companies have found themselves encircled by potential buyers in line with this same trend, with Danish payment firm, Nets A/S, announcing that it had been approached, with observers attributing the interest to Visa or Mastercard.

Another company facing downward financial trajectory due to weakening grip on the market is tech giant IBM, suffering the debilitation of legacy elements of the business, and finding it difficult to break into popular cutting edge areas.

 

Topics in this article: , , , ,
Websites in our network
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
I consent to New Statesman Media Group collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU