PortalPlayer ( PLAY) dropped 14% in late action Monday after the maker of chips for personal media players said it would sell 4.5 million shares to the public. The San Jose, Calif., company also posted a third-quarter profit that beat Wall Street's expectations. For its third quarter ended Sept. 30, PortalPlayer made $10 million, or 40 cents a share, up from the year-ago $3.2 million, or 18 cents a share. Revenue more than doubled to $57.9 million from the year-ago $25.6 million. Analysts had been looking for a 35-cent profit on sales of $56 million. PortalPlayer also guided to fourth-quarter earnings of 34 to 43 cents a share, including shares to be sold in the coming offering, on revenue of $65 million to $75 million. Analysts were looking for a 43-cent profit on fewer shares and revenue of $67 million. "We are very pleased with our financial performance in the third quarter of 2005," said CEO Gary Johnson. "In addition, the first flash-based media player that uses our technology was introduced during the third quarter, and, for the first time, we recorded revenue from flash-based designs. We also met and exceeded our production goals in this quarter. Overall, we are very proud of these results." Shares of PortalPlayer surged $2.11 to $27.86 in regular trading Monday before dropping $3.81 to $24.05 in late action.