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Silicon Laboratories sinks on warning

Shares fall 14 percent after the company announces it will lower estimates for the first quarter.

Silicon Laboratories' shares fell 14 percent after the company announced it would lower estimates for the first quarter.

The company, which makes integrated circuits for the wireless, wire-line and optical communications industries, is yet another of 2000's initial public offerings to fall to a fraction of its opening price.

Silicon Laboratories shares were off $2.31 to $15.50 Friday. The company reached $31 a share in its debut last March.

Silicon Laboratories now expects first-quarter revenue to be in the range of $13 million to $15 million with a net loss from operations of 3 cents a share to 5 cents a share.

The company said in its fourth-quarter conference call that revenue would be between $16 million to $18 million and earnings would range from breakeven to 2 cents a share.

The shortfall is due primarily to the decline in the company's Direct Access Arrangements (DAA) business, in which it cannot "accurately predict improvement." The company's silicon DAA products are used in telephone networks.

Silicon Labs said several customers have overstocked inventory, and it is seeing order cancellations and schedule push-outs.