Chip designer Inphi lowers second-half outlook

AP News
Posted: Aug 23, 2011 5:29 PM
Chip designer Inphi lowers second-half outlook

Chip designer Inphi Corp. on Tuesday reduced its second-half outlook after it said the rate of customer orders slowed and there likely will be additional shipping delays for two next-generation products. It also discontinued the sale of some assets in Taiwan.

Shares of the Santa Clara, Calif., company fell 28 percent in after-hours trading.

Inphi develops semiconductors that are designed to ease bottlenecks on communications and computer networks.

After releasing its outlook last month, Inphi said it became aware of the possibility of additional shipping delays for iMB and RDIMM memory products. In addition, the rate of customer orders has been slower than anticipated.

The company said that it expects demand and associated revenue growth for the next-generation products to pick up in 2012.

Inphi also has decided to discontinue the sale of some acquired legacy products in Taiwan. Its third-quarter results will reflect restructuring expenses related to this decision. The total will be determined after an evaluation of the assets.

For the third quarter, Inphi said it expects revenue to range between $16 million and $18 million. The previous revenue estimate was between $22 million and $24 million.

Adjusted net income, excluding stock-based compensation expenses, was forecast between flat and $800,000, or flat to 3 cents per share.

Previously, the company had predicted adjusted net income, excluding stock-based compensation expenses, between $2.8 million and $3.7 million, or 10 cents to 13 cents per share.

Analysts surveyed by FactSet had estimated third-quarter earnings of 5 cents a share on revenue of $22.8 million.

Inphi withdrew its expectations for a sequential, 10 percent to 20 percent improvement in fourth-quarter revenue that was based on increased product sales.

Shares of Inphi rose $1.23, or 13.3 percent, to end at $10.50 but fell $2.93 in after-hours trading.