Hauppauge Digital Inc. (Nasdaq: HAUP) warned of a rough second quarter and fiscal 2000 Wednesday due to the lack of demand for digital TV.
Investors were bailing out of the stock, which dropped 13 3/4 to 24 3/4, or 36 percent Wednesday morning. Its price had just hit a 52-week high of 48 1/2 March 27, having come a long way since the year's low of 4 1/2.
Hauppauge Digital, which makes WinTV circuit boards that allows viewers to watch TV and other digital video images in a resizable window on a PC monitor, said revenue for the second quarter, ending March 31, will be about $19 million. Net income will be around $200,000, or 2 cents a share. First Call's consensus of 2 analysts had expected the company to rake in a profit of 12 cents a share.
The earnings per share amount gives effect to a 100 percent stock dividend paid on March 24, to stockholders of record as of Feb. 24, the company said.
The company's higher than expected expenses in setting up and operating new international sales offices, combined with the slow take off of the Digital TV market are the cause of the shortfall, said CEO Ken Plotkin in the company's release.
"The company expects that the persistent slow acceptance of Digital TV products in the U.S. may have a continuing negative impact on the company's performance for the rest of fiscal 2000,'' Plotkin added.
Final results for the quarter will be announced the first week of May.
Hauppage competes with 3dfx (Nasdaq: TDFX), ATI Technologies (Nasdaq: ATYT) and Pinnacle Systems (Nasdaq: PCLE).