Internet communications company ESS Technology Inc. (Nasdaq: ESST) cut its financial forecast for the fourth quarter 2000 and first quarter 2001 Monday, citing sluggish orders for its products.
Shares of the company rose 9 percent at market close Friday, up 0.88 to 10.19.
ESS Technology said it now expects fourth quarter revenue of between $57 million and $63 million, with earnings per diluted share coming in between 3 to 8 cents. The new numbers are well below First Call Corp. estimates, which called for earnings of 29 cents.
The company also lowered its guidance for the first quarter of 2001, with revenues now expected to be between $67 million to $73 million and earning in the range of 8 to 12 cents per share. Analysts estimates were for first quarter earnings of 30 cents per share.
In a press release, Robert Blair, ESS Technology president and CEO, said the shortfall is due to slumping orders from the company's PC-related products, caused by a weak market and a significant build-up of inventory already in the channel.
The company added that its video revenue in the fourth quarter is below expectations because video products including DVDs and VCDs, are increasingly being exported to markets worldwide for the Christmas season. The export trend moves purchases up to the third quarter from the fourth quarter.