TriQuint (TQNT) pulled the plug on the theory that there's a rising mobile-phone tide lifting boats around the market.
The chipmaker warned that it would not meet the $75 million to $80 million in revenue it had projected for its fourth quarter ending Dec. 31, but would instead garner more like $64 million to $66 million. The company anticipates a loss of 1 to 3 cents a share, instead of projected profits of 4 cents to 5 cents. Analysts were taking TriQuint on its early word, forecasting $75 million in revenue in TriQuint's fourth quarter, good for a 4 cents a share profit, according to Multex.com. In last year's fourth quarter, TriQuint notched $90 million in revenue and 27 cents a share profit, and the new outlook represents a drop of 27% to 29% from that period.
CEO Steve Sharp attributed the shortfall to "seasonal effects tied to the selling season" in the holidays and "potentially lower sales of phone products" in the March quarter.
TriQuint's previous predictions had accounted for flat to slightly higher revenues in the fourth quarter over the third quarter's $80.8 million. At the time, TriQuint didn't feel overly positive about the immediate future, projecting $70 million to $80 million in revenue for the first quarter of 2002. On Tuesday the company pulled back from that goal, saying the first quarter would show no growth from the newly trimmed fourth quarter. Street consensus for the company was for a downturn in revenues to $72 million in the first quarter of 2002 and a profit of 3 cents a share.
When Sharp addressed the company's fourth-quarter outlook in October, he said 90% of the fourth quarter's initially predicted revenues had already been ordered. At a mid-quarter update, however, Sharp gave the impression that some handset makers were backing away from their orders, and he guided toward the low end of the company's revenue range, or $75 million. US Bancorp Piper Jaffray analyst Sam May argued at the time that TriQuint was suffering because of its lack of GSM products, a technology that is favored in phones sold in Europe, parts of Asia and increasingly in the United States. May's firm has a banking relationship with TriQuint.
Recent events have upped the pressure on TriQuint. On Monday the company announced that Kimon Anemogiannis, who had been the head of successful acquisition Sawtek and was group president of Sawtek after it joined TriQuint, would leave the company. Additionally on Monday, mobile-phone chipmaker
heralded its merger agreement with the wireless unit of Rockwell spinoff
, adding technology might.
The company also reiterated plans to post a $100 million impairment charge to write down the cost of excess capacity and devalued equity investments.