Shares of Irvine-based Broadcom Corp. slumped on Thursday, dragged down after San Jose-based networking gear maker Cisco Systems Inc. reported an outlook for the current quarter that fell well below Wall Street’s expectations.
Broadcom’s shares closed down down more than 2% in on a recent market value of $21 billion.
Cisco reported results for the September quarter late on Wednesday that were in line with the average expectation of analysts.
The sales outlook for the current quarter was another story.
Cisco said it’s expecting quarterly sales of about $10.2 billion, short of analysts’ expectation of $11.08 billion in sales.
Cisco said it expects inventories to swell 15% and sees weak orders ahead in certain parts of its business, including for television set-top boxes and government sales, Chief Executive John Chambers said.
Broadcom is the biggest supplier of set-top box chips.
Other local tech stocks weren’t immune from Cisco’s slump and saw their shares dragged along, even if they don’t have direct ties to Cisco.
“To some degree those companies all depend on Cisco or other networkers for their business,” Bryan McCormick said in a report on investing website Seekingalpha.com.
Shares of Aliso Viejo’s QLogic Corp., a maker of electronics for data storage networks, closed down 1% on a recent market value of $2 billion.
Santa Ana’s Ingram Micro Inc.’s closed down 1% on a market value of nearly $3 billion. Ingram is the top distributor of computers, software, consumer electronics and other technology products.
Cisco’s shares took the biggest beating on Tuesday after a handful of analysts downgraded the stock.
Its shares plunged more than 16% on a market value of $116 billion. Nearly $30 billion has been erased from its value since the close of trading on Wednesday.
