Conexant Systems (Nasdaq: CNXT) tumbled 22 percent Thursday after a mixed third-quarter report.
The company met Street estimates in its third quarter, earning $51.5 million, or 22 cents a share, on target with First Call's estimates. Sales were $530.5 million, a 39 percent improvement from the year-ago quarter when it made $25.7 million, or 12 cents a share.
Shares were down 11 1/16 to 38 5/16.
The company said it anticipates operating income will decline by 10 percent for the fourth quarter, as a result of increased research and development investments associated with recent acquisitions. It also projected revenue growth of six to eight percent, with significant contributions from its networking and digital infotainment businesses. It expects to maintain gross margins of 46 to 47 percent.
"Looking to fiscal year 2001, we anticipate continued strong demand across all of our businesses. Our revenue outlook has improved to $2.7 billion, up 30 percent over the current year. We expect our expansion platform businesses to grow more than 40 percent in the aggregate, led once again by our network access and wireless communications divisions," said CEO Dwight Decker in a prepared release.
Conexant also said it anticipates that this improved revenue outlook, coupled with a modest gross margin expansion, will enable the company to grow operating profit somewhat faster than revenues and offset the dilutive impact of recent acquisitions.