Shares in semiconductor design and manufacturing company Cypress Semiconductor Corporation (CY) shed almost 6 percent today, tallying the week’s losses at over 20 percent so far. Today’s drop follows downgrades from analysts, with Mizuho (MFG) and Feltl & Co. both cutting their price targets by $2 a share and Wedbush by $4 a share.
Company cuts guidance on weak sales in Asian markets
The start of Cypress’ decline started on Tuesday when the company cut guidance for 4th quarter revenue on account of weaker-than-expected mobile handset sales in Asia. The company manufactures touch controllers used in Samsung (SSNLF) devices. Cypress now expects third quarter earnings to be $0.10 to $0.12 per share on revenue of $184 million to $187 million, and fourth quarter revenue is expected to be lower than that. Previous forecasts has earnings at $0.17 to $0.18 per share on revenues of $201 million to $207 million. That news sent shares tumbling over 10 percent yesterday.
"We are seeing greater than expected weakness in our mobile handset revenues, mainly within Asia, due to a customer push out of certain new handset programs to Q1, as well as order reductions at various end customers in China to balance inventory levels," Chief Financial Officer Brad Buss said
Analysts cut price targets
Most likely sparked by the revisions to that guidance, analysts at Mizuho reiterated their buy rating, but cut their price target from $14 a share to $12. Feltl & Co. reiterated their hold rating and cut the price target from $12 to $10. Shares are currently trading at about $9.10. Wedbush analyst Betsy Van Hees downgraded shares from outperform to neutral and cut her price target from $14 to $10 a share, saying Cypress is “once again back in the penalty box for what we think this time could be for an extended stay of at least a couple of quarters.”
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer