Earlier this month, it signalled a first warning for its fourth quarter.

Wolfson released third quarter results Monday (October 27) showing pre-tax profits in the quarter " crucial because it includes pre-Christmas sales " down to $8.3million, from $14.7 million in the corresponding quarter of 2007.

Revenue for the quarter fell to $60.5 million from $70.4 million last year.

Wolfson said that since the trading update on 2 October, the market environment has continued to weaken and it had experienced a further "broad based deterioration in order intake and rescheduling of orders."

The company now expects fourth-quarter revenues to be between $35 million and $45 million. Earlier this month, it said it expected fourth-quarter revenues of $45 million to $50 million. Market expectations before that had been for revenues in the three months of around $60 million.

"The company continues to be affected by the unprecedented uncertainty surrounding global consumer confidence, leading customers across a broad range of applications to further scale back their orders to volumes well below normal seasonal patterns," said Dave Shrigley, CEO of Wolfson.

"In response we are continuing to control costs tightly to mitigate the impact on margins and maintain cash generation," said Shrigley. "With a strong market position, a robust balance sheet and a business strategy aimed at significantly expanding our addressable market, we remain well placed to return to growth when market conditions improve."

Wolfson attributed the fall in third-quarter revenues to falling sales of MP3 players and satellite navigation devices and the generally poor macro-economic environment. Gross margin fell to 50.1 per cent, from 51.8 per cent in the first half this year.

One percentage point of the margin fall was a result of slow movement in stock, while another half a percentage point resulted from the need to retest a specific part, which the company would not identify.

The latest warning increases the challenges facing Mike Hickey when he takes over as chief executive from Shrigley on January 1.

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