Shares of Newport Beach-based chipmaker Mindspeed Technologies Inc. plummeted after the company gave a glimpse at its first quarter results, which fall below Wall Street’s expectations.
Investors sent the stock down more than 8% in afterhours trading on a recent market value of $210 million.
Including gains from patent sales, Mindspeed said it’s expecting first quarter revenue of $40.5 million, which is just shy of its previous outlook of $40.3 million to $41.2 million in sales.
The company didn’t give a profit outlook.
Analysts, on average, are looking for Mindspeed to post profits of about $4 million on sales of $43.2 million.
Mindspeed said the sales shortfall stems from “weaker demand.”
“We experienced a weaker demand environment in the fiscal first quarter of 2011, primarily related to our legacy wide area networking business, specifically from a few, large wireless communications customers,” Chief Executive Raouf Halim said.
Going forward, Halim said the demand picture has “stabilized.”
“Based on current backlog and customer forecasts, our perspective is that the demand environment has stabilized and customers appear to be making good progress absorbing systems inventory built up during the supply constrained environment of the last few quarters,” he said.
This is the second quarter in a row that Mindspeed has given a tempered sales outlook.
Mindspeed’s chips get built into third- and fourth-generation telecommunications networks.
