Micrel Warns of Weak Results

The company blames low demand for cell phones and components, mainly in Asia.
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Micrel

(MCRL)

warned Wednesday evening that second-quarter revenue will be lower than expected because of a decrease in demand for cell phones and cell-phone components, mainly in Asia.

Shares of the San Jose, Calif., company were down 6% to $10.32 on the

Nasdaq

.

For the quarter ended June 30, the company expects revenue to fall 3% to 4% from the first quarter's sales of $51 million. The company originally expected revenue growth of 3% to 5%. Analysts forecast $53.1 million. In the second quarter last year, total sales were $55.4 million.

Second-quarter results will be announced on July 23, the company said.

"Sales to customers serving the communications infrastructure and Ethernet markets grew during the second quarter, but the increased revenue from these end markets was insufficient to offset the decline in wireless revenues," said Chief Executive Ray Zinn in a statement. The company also said its overall booking level was weaker than expected, citing SARS in certain Asian countries.

Due to the lower revenue forecast, the company now sees a loss of a penny a share, but analysts were expecting a profit of a penny. The company broke even in the second quarter last year.

Looking to the third quarter, the company said revenue should increase sequentially from the second quarter. Micrel said its backlog entering the quarter is largely flat with the backlog at the beginning of the second quarter, but that it has increased demand forecasts from its wireless customers.

Analysts expect $56.2 million in revenue in the third quarter. The company's total sales were $50.4 million in the third quarter last year.