The San Jose, Calif.-based company said that revenue for the quarter was $262 million, below the previously predicted $280 million. Earnings for the quarter are expected to be between 23 cents and 26 cents per share, below earlier forecasts for 30 cents to 34 cents per share. Analysts had been expecting Cypress to post earnings of about 30 cents a share, according to First Call.
"The first quarter ended worse than we expected. We barely turned positive on bookings with cancellations offsetting virtually every order we received," CEO T.J. Rodgers said in a release. "It is not clear if our customers reduced the inventory positions they were trying to manage, considering that end demand has really slowed down."
Cypress will take a $25 million charge to revenue in the first quarter for a restructuring that involved converting a high-volume strategic account to a consignment program and changing European and Asian distribution sales models.
Without the charges, revenue in the first quarter was $287 million, down 22 percent from the fourth quarter's $370 million, but up 9 percent from a year ago.
Looking ahead, Rodgers said that although it's hard to predict future results, the first quarter suggests that the company should expect second-quarter revenue to be between $200 million and $210 million, with earnings before goodwill in the single digits. Consensus expectations were for a profit of 25 cents per share on sales of $242.75 million.
First-quarter results will be formally released on April 19, and the company will give more explanation and guidance at that time, Cypress said.
Cypress makes integrated circuits products, including programmable logic devices used in the communications, computer and electronics industries. Those sectors have been hit hard by the economic slowdown, prompting the company to reduce estimates last month.
Lehman Brothers analyst Dan Niles said Monday that the current slump could lead to the "worst year ever" for semiconductor stocks, saying that the overall market may tumble 18 percent to 20 percent. He cut the company's earnings estimates then from $1.36 per share to 50 cents for the year, saying that Cypress "should be able to stay profitable in (the second quarter) due mainly to cost cutting. Barring a turnaround in the market (the third quarter) is likely to flirt with losses."
In morning trading Tuesday, Cypress shares rose 91 cents to $16.31, a gain of about 6 percent.