More Pain at Cypress Semi

It sees a non-GAAP loss of about 13 cents a share in the fourth quarter.
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A tough 12 months worsened for

Cypress Semiconductor

(CY) - Get Report

Thursday when the company previewed a wider-than-expected fourth-quarter loss and said it will eliminate up to 250 jobs worldwide.

The stock rose 24 cents, or 2.4%, to $10.24 in premarket trading.

The circuit maker expects to lose 13 cents a share before amortization of intangibles and other items in the quarter, on revenue of $209 million. Analysts had expected a loss of 4 cents a share on sales of $208.7 million, according to Thomson First Call.

The low end of Cypress' previous fourth-quarter loss estimate was 9 cents a share. "Most of the difference is due to the underutilization of its factories," Cypress said Thursday.

The company plans a restructuring that will include the merging of its timing technology division and personal communication division into a "market-oriented consumer and computation division." It will also reduce its workforce at a factory in Minnesota, close a computer-aided design center in Texas, and reduce "the number of layers of management in the company."

The moves will create "a reduction in force that could affect as many as 250 employees worldwide." Cypress expects to record a charge of about $15 million to cover the steps.

Cypress' stock was roughly halved in 2004 amid a string of earnings shortfalls. The company announced lower third-quarter earnings on Oct. 14, saying at that time: "What appeared to be a simple, short-term over-inventory situation in the computation and consumer segment has extended to our communications and wireless segments as well."