(Reuters) - Entropic Communications Inc, which designs chipsets for video and broadband multimedia applications, cut its outlook for the first quarter as a U.S. pay-TV service provider delayed orders for set-top boxes.
Shares of the company were down more than 8 percent at $4.26 in morning trading on Monday.
Entropic’s chips are used in set-top boxes made by network gear makers such as Cisco Systems Inc and Motorola Solutions Inc. Service providers including Verizon Communications Inc, DirecTV and Time Warner Cable Inc deploy these set-top boxes.
Entropic said the delay in orders were related to high-definition digital terminal adapters (HD-DTA) set-top boxes, which enable service providers to deliver HD content to their basic subscribers.
Benchmark Co said it believes the service provider delaying set-top box orders is Comcast Corp.
“Because of the delayed rollout of these boxes to basic cable subscribers, it will take a few quarters for HD-DTA set-top box suppliers to burn through Entropic inventory,” the brokerage said.
Entropic now expects first-quarter revenue of $74 million to $76 million, down from its previous range of $79 million to $81 million.
It expects a profit of up to 1 cent per share, excluding items, compared with its previous forecast of 2 cents per share.
The company expects to release first-quarter results on or around April 30.
Reporting by Sayantani Ghosh in Bangalore; Editing by Saumyadeb Chakrabarty and Joyjeet Das