Cypress Semiconductor cuts outlook, shares drop
(Reuters) - Cypress Semiconductor Corp cut its third-quarter forecast, citing weakness in mobile handset revenue from Asia, and said it expected its fourth-quarter revenue to be lower than that of the current quarter.
The company's shares fell 10.5 percent in premarket trading.
The company, whose touch controllers are used in devices made by South Korea's Samsung Electronics Co, now expects adjusted third-quarter earnings of 10 to 12 cents on revenue of $184 million to $187 million.
It had earlier forecast adjusted earnings of 17 to 18 cents per share on revenue of $201 million to $207 million. Cypress's third-quarter forecast in July had accounted for reduced demand from its major handset customers.
"We are seeing greater than expected weakness in our mobile handset revenues, mainly within Asia, due to a customer push out of certain new handset programs to Q1, as well as order reductions at various end customers in China to balance inventory levels," Chief Financial Officer Brad Buss said on Tuesday.
The company, whose rivals include Atmel Corp, Altera Corp, Freescale Semiconductor Ltd and Synaptics Inc, said fourth-quarter revenue was likely to fall 9 to 11 percent sequentially.
Cypress expects the fourth quarter to be impacted by the continued weakness in demand for its TrueTouch touchscreen controller and inventory adjustments at its customers.
The company has said it supplies to Samsung, which accounted for about 11 percent of its revenue last year. However, it is also a supplier to Apple Inc, according to the iPhone maker's 2013 supplier list.
Cypress said the revenue weakness was mostly specific to certain end-customer challenges in the handset market and was not a broad-based customer weakness.
Cypress will report current-quarter results on October 17.
The company's shares were trading at $10.40. They had closed at $11.44 on the Nasdaq on Monday.
(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sreejiraj Eluvangal)