Closed Cinemas to Take Toll on Dolby; Stock Falls

Dolby is bracing for Q3 unit shipments 15-25% lower than previous models, said Chief Financial Officer Lewis Chew on the company’s Monday fiscal Q2 earnings call. For the June quarter, Dolby projects revenue of $225 million-$250 million; it expects most global cinemas to remain closed through the end of June. Revenue for fiscal Q2 ended March 27 was $352 million vs. $338 million in the year-ago quarter, below analysts’ consensus expectations of $361.4 million and Dolby’s $370 million-$390 million guidance. Management cited a lack of visibility into Q4. It will be looking at indicators such as how consumer spending rebounds, the rate of consumers’ return to the cinema and “what social distancing restrictions they might be under,” said CEO Kevin Yeaman. The company extended Dolby Vision technology to the iPhone SE and to Showtime and CBS streaming content, Dougherty & Co. analyst Steven Frankel wrote investors Tuesday. The stock closed down 5.8% at $55.15.