NEW YORK ( TheStreet) -- Late Tuesday, Broadcom (BRCM - Get Report) offered more signs of slump in the cable TV sector, a bad omen for Cisco (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 Motorola Mobility (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 "air pockets," 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. >To contact this writer, click here: Scott Moritz, or email: email@example.com. To follow Scott on Twitter, go to http://twitter.com/TheStreet_Tech. >To send a tip, email: firstname.lastname@example.org.