Sarine Technologies’ revenue dropped significantly in the third quarter as an oversupply of polished diamonds resulted in manufacturers limiting production and spending less on equipment.
Sarine, which supplies technology to the diamond-manufacturing sector, estimated that revenues amounted to just over $11 million in the third quarter, implying a drop of about 36% from a year ago, according to a company statement last week. It also expects to report an operating loss of “several hundred thousand dollars.”
The industry often suffers from stock excesses at the end of the second quarter or the beginning of the third as cutters over-produce in the first half to fill retailers’ post-holiday inventory gaps, the Israel-based company explained. This year’s oversupply was worse than usual, having grown in the third quarter, it added.
Compared with the second quarter, Sarine’s revenue fell about 40%, with roughly 75% of the decline attributable to the market conditions, the company said. The rest of the drop was due to alleged infringement of the company’s intellectual-property rights by other parties and uncertainties resulting from related litigation, it explained.
Sarine will release full third-quarter results on November 12.