Trident's Disappointing Quarter

The company loses half of its market value on a weak financial report.
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SAN FRANCISCO -- Another day, another crashing chip stock.

Investors cut

Trident Microsystems'

(TRID)

stock value nearly in half Friday, after a weak financial report a day earlier that triggered at least three downgrades from Wall Street analysts.

The Santa Clara, Calif.-based company said it was facing increasing competition in the market providing chips for low-cost flat-panel televisions. Trident forecast sales in the current quarter between $70 million and $72 million, sharply below the $91.6 million expected by analysts.

Jefferies analyst Adam Benjamin said that the company's outlook suggests EPS in the current quarter of 23 cents -- below the 33 cents expected by analysts polled by Thomson Financial.

Shares of Trident fell 41.9%, or $5.12, to $7.08 in midday trading Friday.

"We expect the company to lose share in the TV market and face increasing price pressure as the market bifurcates," wrote Benjamin in a note to investors downgrading Trident to a hold rating.

"Trident's bet on the high-end poorly positions it to address the faster growing low-end TV market which requires low-cost and highly integrated system-on-a-chips," wrote Benjamin.

Jefferies makes a market in Trident shares.

Deutsche Bank and Oppenheimer also downgraded Trident on Friday to hold and neutral, respectively.

Trident is the latest casualty in a

brutal earnings season for chipmakers that has erased billions of dollars in shareholder value.

Chipmakers

Altera

(ALTR) - Get Report

,

Broadcom

(BRCM)

and

FormFactor

(FORM) - Get Report

have all seen their shares plunge more than 15% or more after reporting earnings.

In the three months that ended Sept. 30, Trident reported revenue of $88.1 million, up 23% year over year, with a net income of $10 million, or 16 cents a share. Excluding stock compensation expenses, as well as amortization charges and fees related to the company's review of past accounting practices, Trident said it earned 38 cents a share.

Analysts were expecting $90.2 million in revenue, with EPS of 32 cents, excluding stock expenses.