Updated from 5:04 p.m. EST

Atheros Communications ( ATHR) swung to a loss in its fourth quarter, on acquisition charges related to the chipmaker's diversification plan.

The Santa Clara, Calif., company said Monday that sales in the three months ended Dec. 31 were $87.8 million, up 65% year over year, thanks to strong demand for its Wi-Fi chips based on the leading-edge 802.11N standard.

Atheros had a net loss of $953,000, or 2 cents a share, in the fourth quarter, including $11.4 million in acquisition-related expenses.

Excluding stock option-compensation expenses, Atheros said it earned 22 cents a share.

Analysts polled by Thomson Financial were looking for 20 cents a share on sales of $86.2 million.

Atheros has spent the last several months broadening its business through a combination of acquisitions and home-grown initiatives.

In October, Atheros acquired Taiwanese chip company Attansic Technology for roughly $72 million in cash and stock.

In a separate announcement Monday, Atheros announced its latest new business, a line of wireless, Bluetooth chips.

Atheros said it will initially target the Bluetooth chips at the PC market, where the company said it has existing relationships with many of the big players, with plans to eventually move into the larger Bluetooth cell-phone handset and headset markets.

Shares of Atheros were up 4 cents at $24.07 in extended trading.

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