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MIPS tumbles on earnings news

Shares in MIPS Technologies, which designs microprocessors for information appliances and cell phones, take a beating after the company narrowly misses estimates for its fiscal third quarter.

Shares in MIPS Technologies, which designs microprocessors for information appliances and cell phones, took a beating today after the company narrowly missed estimates for its fiscal third quarter.

MIPS yesterday reported net income of $10.4 million, or 26 cents a share, for the quarter, down from $10.7 million for the same period a year ago. Analysts polled by First Call/Thomson Financial had predicted the company would earn 27 cents a share.

MIPS blamed the revenue shortcoming primarily on a decline in Nintendo 64 royalties. Income from royalties dropped 22 percent to $18.1 million, while contract revenue increased to $8.8 million from $3.4 million a year ago.

A precipitous stock slide on Wall Street and the slightly disappointing earnings have coincided with a sharp decline in MIPS's stock price. The company's shares were down nearly a third in late trading on Nasdaq today, sinking $11.88 to $25.81.

MIPS was spun off from high-end workstation maker Silicon Graphics, now SGI, in 1998. The company creates chips for handheld computers, set-top boxes, cell phones and other non-PC applications.