24 Aug 2012

Rakon worries the recovery has fizzled

9:27 pm on 24 August 2012

Auckland-based technology company Rakon says it remains cautious about the current financial year because earlier signs of recovery appear to have fizzled out.

The electronics company makes components for mobile phones and telecommunications and says the consumer market is growing in line with the adoption of smart phones and tablets.

But that market is competitive, with tight margins, and customers are delaying spending money, it warns.

Rakon expects its full year profit to be ahead of last year, with underlying earnings to be between $14 million and $16 million, representing an increasing of about 18%.

The company also makes electronic components for infrastructure equipment and smartphones produced by Chinese telecommunications company Huawei.

Earlier in August it signed a deal with Huawei worth at least $SU56 million over the next five years.

Rakon's biggest customer currently is Alcatel-Lucent. It also supplies Ericsson.