Newport Beach-based Mindspeed Technologies Inc., a maker of networking chips, on Monday narrowed its outlook for the current quarter.
For the three months through September, Mindspeed expects to report sales of $43.7 million to $45.9 million, in line with analysts’ expectation of $44 million in revenues.
It didn’t give a profit outlook.
Analysts, on average, are looking for adjusted profits of $5.5 million, up from break-even in the year-ago quarter.
The outlook failed to impress investors.
The chipmaker’s shares were flat in afterhours trading on a recent market value of $280 million.
At this point in the economic recovery, investors seem to be after a consistent “beat and raise” quarter. That’s when companies top expectations for the recently ended quarter and guide higher for the current one.
The middle-of-the-road outlook comes on the heels of Mindspeed’s results for the June quarter, which were in line with expectations.
For the three months through July 2, Mindspeed reported $43 million in sales, up 33% from the same period a year earlier.
Excluding charges for stock compensation, severance pay, write-downs on assets and other one-time costs, Mindspeed posted profits of $4.8 million, compared with a loss of $3 million in the year-ago quarter.
The company ended the quarter with $34 million in cash.
A good part of Mindspeed’s business of late is from networking gear makers in Asia that buy its chips to convert phone calls to digital signals so they can be sent over fiber-optic lines.
Sales to China make up about half of Mindspeed’s revenue. Its biggest customers are large Chinese networking companies, including China Unicom Ltd. and Huawei Technologies Co., as well as Japan’s Nippon Telegraph and Telephone Corp.
In a separate announcement on Monday, Mindspeed said it inked a deal to sell certain “legacy” patents for $10 million.
Financial terms of the deal, nor any information about the buyer, were not disclosed.
Mindspeed said it should see a benefit of $7.5 million to its top line during the current quarter and the remaining $2.5 million should show on its books during the December quarter.
The financial outlook it gave doesn’t include the benefit from the sale.
The deal could bring in more revenue down the line for licensing royalties, the company said.
