A closely watched chipmaker and one of the biggest computer wholesalers in the world issued tepid fourth-quarter guidance and saw their shares whacked for it Tuesday.
Camarillo, Calif.-based processor maker
and Clearwater, Fla., wholesaler
both matched or beat third-quarter expectations but guided lower for the current period, with Tech Data warning of industrywide softness.
Specifically, Semtech earned $13 million, or 17 cents a share, on revenue of $47.2 million in the third quarter; analysts had been forecasting earnings of 14 cents a share. But for the current period, the company expects to earn 9 cents and 11 cents on sales of $43 million to $45 million. Analysts had been expecting earnings of about 14 cents a share. Within its segments, the company sees sequentially declining sales for test and measurement products for computer gaming.
The shares fell 14% to $15.50 in the Instinet premarket session.
Tech Data, a far larger company with a potentially unique vantage point on industry trends given its wholesaler status, said it has seen a further softening in demand over the last few weeks, both in the U.S. and abroad.
In the third quarter, Tech Data earned $32.8 million, or 57 cents a share, on revenue of $3.8 billion, matching expectations. But the company cut its fourth-quarter sales forecast to between $3.8 billion and $3.95 billion, down from expectations of $4.01 billion to $4.48 billion.
"We did notice some significant softening toward the latter part of October and in November," CEO Steven Raymund said in a conference call. "The past few weeks were slower than what we might have hoped for in the U.S."
The shares were downgraded by First Albany to neutral from buy Tuesday. The brokerage said it still wasn't clear if the problems were industrywide or specific to the company. On Instinet, the stock was down 10% to $30.