French smart card manufacturer Gemplus has warned that full year revenue will be below previous forecasts due to a quality problem with a chip.
The vendor says revenue for the fourth quarter is now expected to be around EUR262m, while fiscal 2005 revenue is expected to be about EUR939m, down from a December forecast of EUR950m.
Gemplus says the revenue decrease is mainly due to a quality issue with a specific chip. It says measures have been taken to resolve the matter with the concerned supplier.
Operating margins for 2005 are now expected to be around seven per cent, down from a previous forecast of eight per cent.
The company says it is not changing its previous target of 10% operating margins in 2007 and it expects to see continued growth in 2006.
Gemplus agreed to merge with competitor firm Axalto in December under a deal that will create the world's largest smart card maker. However earlier this week rival vendor Oberthur said it may call on the French financial regulator Autorité des Marchés Financiers (AMF) to investigate the deal.