SAN FRANCISCO -- Investors abandoned On Semiconductor ( ONNN) Tuesday, after the chipmaker missed Wall Street's third-quarter earnings estimates and served up a weaker-than-expected sales forecast. Shares of On Semi plunged 15.7%, or $1.92, to $10.27 in midday trading Monday. The Phoenix-based company said that sales in the three months ended Sept. 28 totaled $402.9 million, down roughly 4% from this time last year, but slightly ahead of the average analyst expectation of $398.8 million in sales. On Semi's bottom line fell 17% year over year to $63.8 million, or 20 cents a share. The results included restructuring charges of $2 million, or 1 penny. Analysts were looking for 22 cents in EPS. The company said that product revenue increased 7% sequentially in the third quarter, thanks to demand in the consumer electronics and computing markets. "As we enter the fourth quarter of 2007, we remain cautiously optimistic about the overall consumer demand environment for the upcoming holiday season," said CEO Keith Jackson in a statement. But On Semi's disappointing financial guidance inspired little optimism among investors, who have been
particularly unforgiving with chipmakers this earnings season . The company said it expects fourth-quarter sales to be flat to up 2% sequentially, suggesting a range of $402.9 million to $411 million. Analysts polled by Thomson Financial were expecting $417.7 million with EPS of 24 cents. On Semi noted that average selling prices of its chips are expected to decline 2% sequentially, while gross margins will be flat with the third quarter's 38.6% level.