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TranSwitch Again Lowers Guidance

Chris Frankie

Chipmaker TranSwitch (TXCC Quote) lowered its first-quarter earnings guidance for the second time in a month.

The company said Monday that it expects to earn 9 cents to 10 cents a share, before charges, in the first quarter as a result of increased cancellations and delays of orders by customers in North America. Twelve analysts polled by Thomson Financial/First Call are calling for the company to earn 16 cents in the quarter. Earlier this month, the company forecast earnings of 16 cents to 17 cents a share. The consensus estimate stood at 19 cents at the time. The company earned 8 cents in the year-ago period.

TranSwitch also lowered its revenue expectation to $38 million and said the top line in the second quarter would be flat with the first quarter in the best-case scenario. At the beginning of the month the company said revenue in the first quarter should be flat with its fourth-quarter total of $51 million.

"Our business in Asia and in Europe remains steady, but there is increased softness in North America," the company said in a statement. "We also remain hopeful that our business condition will start improving by June 2001. A clear indication of a positive trend would be improved order flow from the contract manufacturers."

Shares of TranSwitch, which is based in Shelton, Conn., dropped 69 cents, or 3.5%, to $18.88 in regular-session Nasdaq trading, and continued to fall to $16.13 in recent after-hours Island activity.