Ahead Of The Bell: Sigma Designs Shares Dip

NEW YORK (AP) — Shares of Sigma Designs Inc. fell ahead of Thursday's market open after the chip designer posted a 50 percent decline in fiscal second-quarter profit and offered a disappointing outlook.

The stock slid $1.62, or 9.5 percent, to $15.50 in premarket trading. The stock has ranged from $6.93 to $18.09 over the past year.

Late Wednesday, Milpitas, Calif.-based Sigma posted earnings in line with analysts expectations, despite lower revenue.

But its guidance for the fiscal third quarter missed analyst estimates. It expects sales of $48.7 million to $46.2 million. Analysts forecast revenue of $53.4 million, according to a Thomson Reuters survey.

However, Robert W. Baird analyst Tristan Gerra reiterated an "Outperform" rating on shares.

He said the results and outlook don't change his view that internet protocol TV revenue is set to rebound "as the competitive landscape remains unchanged." Sigma makes chips for IPTV devices.

Gerra said the company's stock "remains inexpensive and reflects low expectations.

"We view potential stock weakness a buying opportunity," he added.