Yet another company said slowing demand in the PC industry has foiled its earnings projections. Elantec Semiconductor fell 28 percent on news it will miss estimates for its second quarter.
Shares of Elantec (Nasdaq: ELNT), a maker of high-performance analog integrated circuits for the video, optical storage, communication and power management markets, were off $8.66 to $22.03. Everyone from PC makers themselves to chipmakers and other technology companies have blamed worse-than-expected business this year on the slowdown of PC sales.
Second-quarter revenue is expected to be down 20 percent to 25 percent compared to the first quarter. As a result of the revenue decline and lower factory loadings, gross margins are now expected to be between 55 percent and 56 percent in the second quarter. Earnings per share for the quarter should be in the range of 20 cents to 22 cents a share. First Call's consensus estimate had pegged earnings at 38 cents a share.
The company said it cut estimates because of the continued economic slowdown and weakening demand, particularly in the PC industry. Customers in this market segment continue to cancel or reschedule orders, causing limited visibility, Elantec said.
The company added that demand for its DSL (digital subscriber line) communications products remains strong, but it won't be enough to offset the decline in other segments.
The company has already initiated a series of cost-reduction actions to partially offset the effects of the reduced revenue.