Lattice Semiconductor shares moved up $3.63, or 22 percent, to $20.19 Friday, one day after the chipmaker warned that its fourth-quarter sales would miss analysts' estimates.
Lattice (Nasdaq: LSCC) and Intel (Nasdaq: INTC), up $1.63 to $33.94, were among several chip stocks to post significant gains after acknowledging that slowing PC demand would crimp sales and earnings this quarter.
After the bell Thursday, Lattice officials told investors to expect sales roughly in line with the $151 million it recorded in the third quarter.
However, investors gobbled up chip stocks on the theory that most of this bad news has already been factored into their slumping stock prices.
Motorola (NYSE: MOT), which also warned this week, was up $2.13 to $19.88. Advanced Micro Devices (NYSE: AMD) gained 44 cents to $15.94 while Atmel (Nasdaq: ATML) and Xilinx (Nasdaq: XLNX) shot up $2.44 and $5.63 a share, respectively.
On Friday, Goldman Sachs analyst Joe Moore lowered Lattice's 2000 earnings estimate to $1.26 a share from $1.28 and its fiscal 2001 estimate to $1.45 a share from $1.70.
Company officials said bookings for November were lower than expected. The fourth-quarter book-to-bill ratio will be under 1.0.
On Wednesday, the logic device maker said its board of directors approved a plan to repurchase up to 5 millions shares of its common stock.
Last quarter, Lattice posted a profit of $22.7 million, or 21 cents a share, on sales of $151 million.
First Call Corp. consensus expects it to earn 36 cents a share in the fourth quarter.
The stock moved as high as $41.69 in January before falling to a 52-week low of $15 in November.
Eleven of the 16 analysts following the stock rate it either a "strong buy" or a "buy."