Shares of chipmaker TriQuint Semiconductor Inc. tumbled almost 13 percent Thursday after the company said it expected to book an unexpected loss during its fiscal second quarter.
THE SPARK: TriQuint Semiconductor said Wednesday that it expects to report an adjusted second-quarter net loss between 10 cents per share and 15 cents per share due to weak revenue and a rise in litigation costs.
Analysts had expected adjusted net income of 5 cents per share, according to a survey by FactSet.
The company expects second-quarter revenue of between $170 million and $185 million, far below an analysts' average forecast of $224 million.
TriQuint also expects to book a charge of $12 million to $14 million in the second quarter to restructure its filter-related operations. About $2 million will be from cash costs related to severance, while the rest is expected to be non-cash.
THE BIG PICTURE: Many investors have bought TriQuint Semiconductor's stock on the basis of one of its biggest clients: Apple Inc.
TriQuint supplies Apple with power amplifiers that help iPhones communicate with cell towers. Many analysts see that relationship as a gold mine because demand for iPhones shows no sign of slowing down.
Earlier this week, Apple said it sold 35 million iPhones in the January-to-March quarter, almost twice as many as it sold a year earlier. Sales were also above analyst expectations.
But working with Apple can have a downside for a smaller company like TriQuint.
The company's stock price was battered in 2011 in part because it dedicated so much of its factory output to churning out parts for Apple. It couldn't keep up with orders from other customers.
THE ANALYSIS: Barclays analyst Blayne Curtis said in a note to clients Thursday that TriQuint is being hurt by a slowdown in orders from Apple.
He cut his 2012 revenue forecast for the company to $850 million from $918 million and his net income forecast to 1 cent per share from 26 cents.
Analysts on average are expecting the company to report an adjusted net loss of 2 cents per share on $857.1 million in revenue.
STOCK ACTION: TriQuint's stock price fell 71 cents, or 12.9 percent, to close at $4.81. Shares have been steadily declining over the last year, and have traded between $3.97 and $14.13.