Synaptics Takes A Hit After Jefferies Downgrade

NEW YORK (AP) — Shares of Synaptics Inc. took a hit Tuesday after a Jefferies analyst downgraded the maker of touchscreen technology for computers and smartphones, citing increasing competition in handsets and a shift to lower-priced products in the PC market.

Blayne Curtis downgraded the company's shares to "Underperform" from "Hold" and said it looks as if orders for the current quarter are below what the company is expecting.

The analyst said his research suggests that the company's business has deteriorated further since his last downgrade, in late July. Synaptics, he said, is facing growing market share loss and increased competition at customers such as LG, HTC and Research In Motion Ltd.

Curtis expects fiscal first-quarter results roughly in line with his and Wall Street's expectations, but thinks second-quarter guidance will fall short.

Curtis is estimating a profit of 41 cents per share on sales of $117 million for the first quarter, which ended in September. Analysts polled by Thomson Reuters are estimating earnings of 42 cents per share on sales of $116.4 million.

For the current quarter, the analyst expects Synaptics to forecast revenue in the range of $130 million to $135 million, below Wall Street's expectations of $139 million.

He thinks product delays at Nokia Corp. and Research In Motion, as well as inventory issues at LG, its largest customer, may hurt the company.

Shares fell $2.29, or 9.8 percent, to $21.15 in afternoon trading. In the past 52 weeks, the stock has traded between $13.85 and $40.94.