Wellington, Nov 14 NZPA - Investors punished Rakon shares after the company posted a 66 percent fall in first half earnings and indicated full year results would be well below expectations.

Net profit for the six months to the end of September at the quartz crystal components company fell to $1.98 million, affected by an increase in depreciation and financing costs plus a higher effective tax rate, due to French operating losses.

Sales revenues for the first half were down 12 percent to $79.4m, which the company said was linked to the global economic situation.

Earnings before interest, tax, depreciation and amortisation (ebitda) for the half year were down 16 percent on the corresponding period last year to $10.4m.

In a mostly strongly rising market, Rakon shares were down 26 percent by mid-afternoon, losing 44c to $1.25. That is the lowest price paid for the company's shares, which were issued at $1.60 and reached $2.40 the day they debuted on the sharemarket in May 2006. The share price peaked at $5.80 in May 2007.

At Rakon's general meeting in September, shareholders had been told full year ebitda was expected to fall near the middle of the brokers' range -- from $23.5m to $34.4m -- and for second half earnings to be stronger than the first.

In contrast, today managing director Brent Robinson said uncertainty and volatility in customer orders and forecast, and the short lead times Rakon operated in, made it difficult to forecast a result for the second half of the 2009 financial year.

But he expected the second half result to be in line with, or slightly below that achieved in the first half of this year.

The company also said today that first half sales volumes from the consumer GPS products-focused New Zealand business were up 3 percent, while revenues were down 10 percent.

That was due to a slowdown in consumer spending that affected the growth Rakon had anticipated in the second quarter of this year.

In September, the company had said it expected sales volume from New Zealand for the current financial year to be about 20 percent ahead of the last year.

Today, Mr Robinson said Rakon had felt the worldwide economic slowdown as it focused on broadening its product base and its markets, and increasing revenue.

The company said it had retained its share in key markets, with customer relationships remaining strong.

Global efforts to develop new opportunities in consumer and infrastructure markets were going well, and the company was confident they would translate into good business in the 2010 financial year.

Mr Robinson said a drop in consumer spending was not unexpected and Rakon's diversification into telecom infrastructure and aerospace sectors would allow the company to remain strong. "We still see great opportunities for Rakon in the GPS and mobile phone space, even with the current economic climate.

"Also our investments in businesses in the UK, France and India have given us diversification into new infrastructure markets and added new opportunities for us to grow through significantly increasing our market share."

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