Chipmaker Hi/fn (Nasdaq: HIFN) tumbled another 44 percent Friday after the company said Thursday it expects to have better-than-expected earnings in the fourth quarter and lighter-than-expected revenue in the first.
Shares fell 32 13/16 to 41 3/16 in heavy trading. Banc Boston Robertson Stephens lowered it to "long-term attractive" from "buy." Robertson Stephens analyst Arun Veerappan lowered his rating on the stock, saying "the company's current guidance... represents an even more substantial change" from the slowdown he had previously expected.
It's been a rough two days for Hi/fn.
Rumors about the maker of chips for storage systems and networking sent the stock tumbling 29 percent Thursday. Shares of Hi/fn fell 30 3/4 to 74, on volume of more than 3 million shares, before trading was halted late in the session.
Hi/fn sees revenue of just $10 million in the first quarter. Two large customers -- disk drive maker Quantum and network equipment vendor Ascend -- told Hi/fn they will cut back orders for the first quarter to reduce their inventories.
First Call's survey of five analysts predicts Hi/fn will report per-share profits of 37 cents in the fourth quarter, 38 cents in the first, and $1.55 in fiscal 2000. Veerappan has a published revenue forecast of $14 million for the recently ended fourth quarter.
The company has more than 60 network equipment customers, mainly in the area of virtual private networks. Hi/fn downplayed the first quarter sales reduction as a "short-term" adjustment. "We see no fundamental change in our business model," said Raymond J. Farnham, CEO and chairman.