PMC-Sierra forecasts punkish earnings
The communications chipmaker warns that it will miss revenue and earnings expectations for the second quarter.
The Santa Clara, Calif.-based company said it now expects revenue to fall in a range between $93 million and $95 million and sees a loss per share between 7 cents and 9 cents, excluding charges.
"It looks at 50,000 feet that it is across-the-board softness," said CEO Bob Bailey in a conference call. He noted that even though the company has not closed its books for the quarter, business from large and small customers appears to have fallen.
Analysts surveyed by First Call expected the company to generate $102 million in revenue and post a loss of 2 cents a share for the quarter.
That compares with the $120 million revenue and pro forma profit of 2 cents a share the company made in the first quarter. In last year's second quarter, the company posted revenue of $134 million and pro forma earnings of 23 cents a share.
The news follows a warning by fellow communications chipmakers Applied Micro Circuits and Vitesse Semiconductor earlier this week.
The companies make chips for communications equipment makers like Cisco Systems, Nortel Networks, Lucent Technologies and others that are buying fewer parts these days because telecommunications service providers have trimmed their spending.
PMC declined to give specific financial information during the call but did say that bookings were positive for every month of the quarter, meaning that the company received more orders than cancellations of orders. The chipmaker also managed to whittle down its inventory backlog during the quarter, which stood at about $94 million at the start.
PMC appears to have escaped relatively unscathed from the price cuts that its equipment customers face from telecommunications carriers. "For the most part, I think our pricing is holding up fairly well," Bailey said.
PMC-Sierra is expected to announce its second-quarter financial results July 19.