Cypress Semiconductor (NYSE: CY) advanced 83 U.S. cents to $16.23 in morning trading Tuesday, even after lowering its first-quarter outlook for the second time. The shares overcame a drop in pre-market trading to open higher.
The San Jose, California-based semiconductor maker said sales for the quarter ended April 1st were $262 million, below its previous estimate of $280 million. Earnings before goodwill likely totaled 23 to 26 cents per share, below the company's previous forecast of 30 to 34 cents.
Changes in the way the company accounts for business cut revenue by $25 million during the quarter, Cypress said.
"The first quarter ended worse than we expected," said chief executive officer T.J. Rodgers. "We barely turned positive on bookings, with cancellations offsetting virtually every order we received.
"It is not clear if our customers reduced the inventory positions they were trying to manage, considering that end demand has really slowed down," said Rodgers. "We still don't have the visibility, but judging from what we've seen in Q1, we are estimating that the second quarter will be another down quarter."
Second-quarter revenue is likely to fall in the $200 million to $210 million range, with "single-digit" earnings before goodwill, Rodgers said.
Cypress plans to report first-quarter results on April 19th.
In March, Cypress lowered its targets for the quarter because of changes to
its business model and declines in orders and selling prices. The company
said it was cutting capital spending and deferring merit-based salary
increases, but would continue to hire technical staff to maintain its pace
of developing new products.
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