Netopia

(NTPA)

threw more cold water on the broadband-equipment space Tuesday night, saying price increases in parts it uses for Internet modems and routers would result in a third-quarter loss that is about four times wider than analysts were forecasting.

Emeryville, Calif.-based Netopia expects to lose 11 cents to 13 cents a share before amortization charges on revenue of $25.3 million and $25.6 million in the three months to June 30. Analysts surveyed by Thomson First Call were forecasting a loss of 3 cents a share on revenue of $24.4 million.

The stock, which fell 8.5% in regular hours trading, was recently down another $1.36, or 22%, to $5.83 on the Instinet late session. The 52-week range is $4.02 to $20.15.

Netopia blamed crimped margins for the wider-than-expected loss, saying higher prices for flash storage and standard memory, and lower average selling prices would result in third-quarter gross margin of 31% to 32%, down from 40.5% last year. The company is also going to expense a $750,000 bad debt charge related to a software reseller in the period.

The warning comes the same day that

Conexant

(CNXT) - Get Report

, which makes chips for Wi-Fi applications, predicted a shortfall, spawning a selloff throughout the communication chip sector. Conexant fell $1.77, or 43%, to $2.31, while

PMC Sierra

(PMCS)

lost 89 cents, or 6.9%, to $12.06 and

Advanced Micro

(AMCC)

lost 49 cents, or 10.2%, to $4.31.