Cypress Semiconductor Warns Earnings, Revenues Below Forecast

Cypress Semiconductor (CY Quote - Cramer on CY - Stock Picks) said Monday that first-quarter revenue and earnings will come in below previous forecasts.

The company blamed "softening" business conditions and excess inventory held by its customers.

The chipmaker said first-quarter revenues would be 15% below the $370 million reported in the fourth quarter of 2000. Previously, the company said it expected a decline of 4% to 9%. In addition, changes Cypress is making to the way it accounts for certain inventory matters will result in a one-time revenue decline of 9%, bringing the total sequential revenue decline to 24%.

The estimated decline could drop revenue to about $281.2 million in the first quarter. In the year-ago period, Cypress, which is based in San Jose, Calif., had revenue of $264 million.

Cypress also said earnings for the first quarter are expected to be between 30 cents and 34 cents a share before goodwill, well below the 56-cents-a-share consensus estimate compiled by First Call/Thomson Financial.

Another chipmaker, Vitesse Semiconductor (VTSS Quote - Cramer on VTSS - Stock Picks), also issued an earnings warning Monday.

Shares of Cypress closed Friday at $18.86. The have a 52-week range of $16.55 to $58.