Shares of Irvine chipmaker Microsemi Corp. were dinged by investors Tuesday after an analyst cut his estimates for the company, citing weakening demand.
On a tough day for technology stocks on Wall Street, Microsemi’s shares closed down more than 6% on a recent market value of $912 million.
Nasdaq closed down nearly 6% in a broad stock market downturn on continued concerns about banks.
Friedman, Billings, Ramsey & Co. analyst Craig Berger lowered his estimates for Microsemi for 2009.
For the year, he expects Microsemi to see profits of about $89 million, down from his previous estimate of $101 million. Berger didn’t lower his sales estimate of $494 million.
Wall Street analysts, on average, are expecting profits of $115 million on sales of $535 million.
Berger also lowered his price target on the stock to $23 a share, down from $24.
Microsemi’s shares closed at $11 Tuesday.
The primary reason for the cuts is “soft global demand” for Microsemi’s chips, which are used by the military and for aerospace and industrial purposes.
Despite his bearish outlook, Berger is still sweet on the stock as a long-term investment and called it a “core chip holding.”
“We believe this business is defensible and sustainable, and that Microsemi is one of those rare chip stocks that one can invest in comfortably, in our opinion, for multi-year periods,” he said in a note to clients.
Microsemi’s shares are off some 43% in the past 12 months.
