Trident's Disappointing Quarter

SAN FRANCISCO -- Another day, another crashing chip stock.

Investors cut Trident Microsystems'(TRID Quote) stock value nearly in half Friday, after a weak financial report a day earlier that triggered at least three downgrades from Wall Street analysts.

The Santa Clara, Calif.-based company said it was facing increasing competition in the market providing chips for low-cost flat-panel televisions. Trident forecast sales in the current quarter between $70 million and $72 million, sharply below the $91.6 million expected by analysts.

Jefferies analyst Adam Benjamin said that the company's outlook suggests EPS in the current quarter of 23 cents -- below the 33 cents expected by analysts polled by Thomson Financial.

Shares of Trident fell 41.9%, or $5.12, to $7.08 in midday trading Friday.

"We expect the company to lose share in the TV market and face increasing price pressure as the market bifurcates," wrote Benjamin in a note to investors downgrading Trident to a hold rating.

"Trident's bet on the high-end poorly positions it to address the faster growing low-end TV market which requires low-cost and highly integrated system-on-a-chips," wrote Benjamin.

Jefferies makes a market in Trident shares.

Deutsche Bank and Oppenheimer also downgraded Trident on Friday to hold and neutral, respectively.