It took just a few weeks for TelCom Semiconductor (Nasdaq: TLCM) to lower its third quarter expectations.
After market close Tuesday, the maker of integrated circuits for wireless devices and other equipment said it sees third quarter revenue flat or slightly down sequentially. The announcement came three and a half weeks after Telcom said it was confident it would increase revenue compared to the second quarter.
As the latest announcement hit the newswires, shares of TelCom tumbled to 11 5/8 in afterhours activity on the Island electronic communications network. TelCom stock closed Tuesday's regular trading at 17 1/4, down 13/16 for the session.
TelCom previously expected revenue in the current three-month period to grow 5 percent from the second quarter, when TelCom earned $4.6 million, or 26 cents per share, on revenue of $20 million. Those second quarter earnings exclude special charges.
Company executives last month said they were not lowering total revenue forecasts, despite a downgrade from Prudential analyst Hans Mosesmann, who questioned the TelCom's design position with the wireless phone unit of Motorola (NYSE: MOT).
Prior to Tuesday's news, First Call's survey of four analysts predicted per-share profits of 24 cents for TelCom's third quarter and 25 cents in the fourth.
Executives for TelCom blamed the revenue disappointment on wireless industry conditions.
"The dynamics surrounding the wireless market are fluctuating more than we had anticipated," said Bob Gargus, appointed CEO last month in addition to his already-existing duties as president. "Product transitions, mix changes associated with customer models and excess customer inventory positions have contributed to weakening order patterns."
Fourth quarter revenue should increase between 5 and 8 percent from the third quarter, the company said.
"We continue to believe the wireless market is robust and will continue to exhibit better than average growth," Gargus said. "On the plus side, we have seen our relationship with ON Semiconductor (Nasdaq: ONNN) accelerate and we now have significant orders in backlog."
TelCom still sees 2001 growth ranging between 25 and 30 percent.>