Reuters: Global Markets: Entropic shares tumble on profit forecast

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Entropic shares tumble on profit forecast Apr 25th 2012, 18:16 Wed Apr 25, 2012 2:16pm EDT (Reuters) - Shares of chipmaker Entropic Communications Inc (ENTR.O) fell as much as 16 percent after it forecast a weak quarterly profit and said supply issues at Trident Microsystems, whose assets it bought earlier this year, will continue to drag on revenue. Trident's suppliers halted order processing following the company's bankruptcy declaration on January 4. Entropic said on Tuesday that supplies had restarted following its buy of Trident's set-top box business but at a reduced level. On a post-earnings call, Entropic, which reported a 17 percent fall in first-quarter revenue, said the supply issues significantly impacted the results. The company said it does not expect the issues to be fully resolved until the third quarter. Entropic, which designs specialized chipsets for video and broadband multimedia applications, forecast adjusted earnings of about 3 cents per share for the second quarter. Analysts on average were expecting 11 cents per share, according to Thomson Reuters I/B/E/S. "(Entropic's) Trident set-top box acquisition turned out to be less profitable than expectations, with management now not expecting the deal to be accretive until the end of 2013," Barclays Capital's Blayne Curtis wrote in a note. The analyst lowered his price target on Entropic's stock to $5 from $6. Entropic bought Trident's set-top box business for $65 million. The company expects set-top box system-on-chip product revenue in the second quarter to be in the range of $16 million to $18 million. Shares of San Diego-based Entropic were down 12 percent at $4.16 in afternoon trading on the Nasdaq. They touched a more than six-month low of $4.01 in morning trading. (Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Maju Samuel) Link this Share this Digg this Email Reprints

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