ESS Technology Tumbles After Lowering Guidance - TheStreet

ESS Technology Tumbles After Lowering Guidance

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Shares of

ESS Technology

(ESST)

lost ground after the company reduced its earnings and revenue forecast for the fourth quarter, citing a decrease in orders for its PC-related products.

The company's shares recently tumbled 42.6%, or $4.28, to $5.88 in trading on the

Nasdaq

.

The Fremont, Calif., company, which produces software and systems for multimedia applications for the Internet, now expects fourth-quarter earnings of 3 cents to 8 cents a share, compared with earnings of 22 cents a share in the same period last year. The new estimates are significantly lower than the three-analyst consensus figure of 29 cents a share, according to

First Call/Thomson Financial

. ESS said its earnings estimate includes potential inventory reserve adjustments that may be required due to the lower revenue.

Revenue for the quarter is expected to total $57 million to $63 million, compared with $88.7 million in last year's fourth quarter.

For the first quarter of 2001, the company said it expects earnings of 8 cents to 12 cents a share, down from 26 cents a share earned last year. One analyst estimated earnings of 30 cents a share for the company's first quarter. ESS also expects first-quarter revenue of $67 million to $73 million, amid continued weakness in PC audio sales.