Sirf Tech Misses Estimates

Sirf Technology(SIRF - Cramer's Take - Stockpickr) saw its profit tumble 92% in the fourth quarter -- below Wall Street expectations -- as acquisition-related charges and aggressive pricing pinched the company's bottom line.

Shares of Sirf plummeted 21%, or $3.42, to $12.85 in extended trading Monday.

Sirf reported sales of $100.4 million in the three months ended Dec. 31, up 35% year-over-year and in line with analysts expectations. The San Jose, Calif., company said it achieved record revenue and unit growth, as sales were "fueled by strong seasonal demand for GPS location-enabled consumer products."

But CEO Michael Canning said in a statement that gross margin was hurt by "a combination of competitive market pricing and a shift of product mix."

Sirf said its net income in the fourth quarter was $717,000, or a penny a share, vs. $9.1 million, or 16 cents a share at this time last year. Sirf's results included about $7 million in acquisition related charges.

Excluding those charges, Sirf said it earned 28 cents a share, 4 cents shy of the average analyst expectation of 32 cents.

Sirf makes GPS chips, which receive data from overhead satellites to provide electronic devices with real-time location information.

In recent months, chipmakers like Broadcom(BRCM - Cramer's Take - Stockpickr), Atheros(ATHR - Cramer's Take - Stockpickr) and NXP have acquired small GPS firms to get a piece of the action. The chipmakers hope to expand the market for GPS chips from the current crop of portable navigation devices used by motorists, by pushing the chips into cell phones, digital cameras and other gadgets.