UPDATE 1-FormFactor slashes Q3 rev view; shares fall

Tue Aug 31, 2010 5:23pm EDT

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* Sees Q3 rev $46-$48 mln vs prior est low-mid $50 mln

* Shares down 4 pct in extended trade

Aug 31 (Reuters) - Chip equipment maker FormFactor Inc (FORM.O) slashed its third-quarter sales view, hurt by a delay in transition of its new Matrix line of products at major customers, sending its shares down 4 percent.

The company, whose customers include Elpida Memory 6665.T, Powerchip Semiconductor 5346.TWO and Intel Corp (INTC.O), now expects third-quarter revenue of $46-$48 million. It had earlier forecast sales of low to mid $50 million.

Analysts on average were looking for revenue of $57.3 million, according to Thomson Reuters I/B/E/S.

The company is in the midst of transition from its Harmony generation products -- known for lower average selling prices and margins -- to the SmartMatrix and TouchMatrix product lines.

FormFactor's third-quarter sales were also hurt by the company's decision to turn away low-margin business, it said in a statement.

Shares of the Livermore, California-based company were down 30 cents at $6.70 in extended trade. They closed at $7.00 Tuesday on Nasdaq.

The stock has shed 37 percent of its value since July 27, when it posted weak second-quarter results and warned of market share losses. (Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Maju Samuel)

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