PMC-Sierra ( PMCS) swung to a loss in the fourth quarter, as the company took a big tax charge and experienced slackening demand for its communications chips.

The Santa Clara, Calif., maker of storage and communications chips on Thursday reported a $42.2 million net loss, or 20 cents a share for the three months ended Dec. 31. At this time last year, PMC earned $18.2 million, or 10 cents a share.

The net loss included more than $50 million in charges related to additional tax expenses, amortization of purchased intangible assets and stock-option compensation expenses.

PMC said the increase in its net loss was primarily due to "an increase in our tax provision arising from a change in our estimate of tax liability for prior years as a result of a written communication we received in 2007 from a tax authority."

Excluding those charges, PMC said it had EPS of 2 cents, which was short of Wall Street's expectations of 4 cents.

Sales in the fourth quarter were $101.9 million, up 31% year over year and within the range of its guidance, which PMC reduced in December to reflect what it characterized as changes in customer demand related to its communications products.

PMC's inventory more than doubled in the fourth quarter to $34.5 million.

Shares of PMC were off 5 cents at $6.25 in extended trading.

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