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Shares of Semtech (SMTC - Get Report) dropped Thursday after the chipmaker posted fiscal fourth-quarter earnings that matched analysts' forecasts but surprised with a reduced outlook.

Semtech stock was down about 4%, or $2.12, at $53.44 on Thursday. In premarket trading the stock had been down more than 8%.

The Camarillo, Calif.-based chipmaker said it earned $37.5 million, or 55 cents an adjusted share, compared to $27.3 million, or 40 cents, a year earlier. 

Sales were $160 million in the quarter ended Jan. 27, above the $158.5 million expected by analysts. In the year-earlier period, Semtech  generated sales of $141 million.

However, the company warned that it is expecting lower results going forward.

For the current quarter, Semtech said it expects to earn an adjusted 33 cents a share on sales of $130 million, well below the current market of 50 cents a share analysts were anticipating. For the same quarter last year, the company earned 47 cents a share on sales of $130 million.

"We are proud to deliver Q4 results that were in line with our guidance despite the challenging environment," CEO Mohan Maheswaran said in a statement. "While the near-term visibility is impacted by China demand softness, geopolitical issues, as well as weakness from both the smartphone and data center end markets, we believe the long-term sustainability of our secular growth drivers in the IoT (Internet of Things), data center and mobile markets should drive a second-half rebound and enable us to deliver another solid financial performance in fiscal year 2020."

Semtech manufacturers various types of semiconductors for smart phones and other consumer devices as well as enterprise computing, communications and industrial equipment.