NEW YORK (
) -- Late Tuesday,
(BRCM - Get Report)
offered more signs of slump in the cable TV sector, a bad omen for
(CSCO - Get Report)
, which posts its second-quarter earnings next week.
The communications chip maker delivered
solid fourth-quarter results
, but offered disappointing first-quarter guidance, sending its shares down 6% Wednesday.
Among the worries, Broadcom pointed to a potential inventory buildup at two of its set-top box customers.
"We expect Broadcom revenue to decline in the first quarter due to excess inventory and a couple of our customers ordering more than underlying demand in fourth quarter," Broadcom CEO Scott McGregor told analysts on the company's earnings call Tuesday.
And since Cisco and
(MMI - Get Report)
basically fill that entire description, analysts had a easy time picking out the usual suspects.
"We believe that Motorola Mobility and Cisco are major buyers of Broadcom's set-top box chipsets and that Broadcom's inventory comments suggest ramping inventory," JPMorgan analysts wrote in a note Wednesday to clients.
The news of weak underlying demand for set-top boxes should sound familiar to Cisco investors. In November, Cisco shares got crushed after the company reported hitting certain
including canceled orders for set-top boxes.
The situation hasn't improved either. With consumers opting for satellite TV or Internet video, the so-called cord-cutting trend continues.
Time Warner Cable
(TWC - Get Report)
said last week that it lost 141,000 video subscribers in the fourth quarter and nearly half a million for the year.
The eroding cable TV business will not help Cisco put together a solid story for investors when the networking gear maker reports earnings next week.
--Written by Scott Moritz in New York.
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