LONDON (ShareCast) - (Sharecast News) - Shares of Dialight dived on Tuesday as the LED manufacturer warned that Sino-US trade uncertainty will impact full year earnings.

The London-listed company said it now expected earnings before interest and tax (EBIT) to be in the range of £5.0m to £8.0m after adjustment for non-underlying costs, compared with the £8.0m EBIT achieved last year.

Though business is entering what is traditionally the busiest part of its year, it cautioned that October was "very weak" and added that the timing of orders continued to be difficult to predict.

The signals and components segment is now not expected to recover until the second half of next year due to weak market conditions, though Dialight said its operational recovery and delivery to customers has improved.

Meanwhile, the New Jersey-headquartered firm was optimistic that gross margins for its lighting business could to return to historic levels following the adoption of a new manufacturing model and a "rapid and controlled" exit from its partnership with US manufacturer Sanmina.

Thus far, the company has been unable to reach a compensation settlement with its former partner and is exploring further options.

Dialight said: "We remain in recovery mode with a strong focus on rebuilding customer and distributor confidence and continued investment in distinctive and competitive products. We have seen early signs of recovery but this has been hampered by the slowdown in the global markets."

Dialight shares were down 19.29% at 243.35p at 1230 GMT.

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