HALF year losses at Wolfson Microelectronics have widened from $7 million to $11.1m (£4m-£7m), but the company hopes to return to underlying profit in the second half of 2012.
There was an 11% decline in revenues from $79.7m to $70.6m in the six months to July 1.
That came in spite of the semiconductor maker reporting a better than expected 5% increase in revenue in the second quarter of 2012 from $38.6m to $40.3m, while losses in the 13 weeks narrowed from $3.5m to $2.9m.
The Edinburgh company said the increased losses across the first six months were driven by factors including the drop in revenue and a $2.4m increase in research and development spending.
The comparable figure from 2011 was also boosted by a one off $1.8m pension curtailment gain.
Finance director Mark Cubitt told The Herald growth was expected to accelerate in the second half of 2012 which would mean a return to profit.
He said: "The overhead base is pretty flat throughout the year so it is all about the operational gearing of the business.
"The return to underlying profitability will be driven by higher revenues and holding margins and overheads at the same level."
Sales in mobile phones were up 30% year-on-year in the first six months of 2012 to $36.3m.
Tablet computer revenues were down but chief executive Mike Hickey expects that to pick up before the end of the year.
He said: "It is just a product cycle thing. Last year a lot of tablets were built and were out to the market being sold.
"Now we are in a product refresh phase. We have a few tablet design ins which are incremental to last year so we expect quite strong full year growth in tablets."
Mr Hickey confirmed revenues are expected to be around $50m in the third quarter. He said: "The economic headwinds are still pretty persistent. We have seen no uplift in home audio, digital still cameras, TVs and the wider based of applications are still not doing as well as they could.
"The reason why we still expect to grow is we have new smartphone and tablet customers and are winning slots with big brands in the areas which are still growing.
"We are not really expecting a general uplift from the other stuff. The economy has been pretty stubbornly bumping along at the bottom for a while now."
Although the number of design ins – where Wolfson's technologies are selected for a device – dropped to 120 those are achieving a record amount of revenue as customers focus on smaller suites of more lucrative products.
Mr Hickey said: "We think our share is increasing but there are less designs ins as everyone is consolidating."
