Cypress Semiconductor Cuts Q3 Guidance; Sees Weak Q4 - Quick Facts

(RTTNews) - Cypress Semiconductor Corp. (CY) said that it has lowered its third-quarter guidance, citing greater than expected weakness in its mobile handset revenues, as well as order reductions at various end customers in China to balance inventory levels.

For the third-quarter, the company now expects GAAP loss per basic share in the range of $0.09 - $0.11, Non-GAAP diluted earnings per share of $0.10 to $0.12, consolidated revenue of $184 million to $187 million, lower than its prior guidance. Analysts polled by Thomson Reuters expect the company to report earnings of $0.17 per share and revenues of $204.70 million for the third-quarter. Analysts' estimates typically exclude special items.

Brad Buss, executive vice president and chief financial officer said, "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. Unfortunately this is resulting in a negative impact to Q3 revenue that was not anticipated in our original guidance.

The company said it believes the following trends will impact the fourth quarter: first, continued weakness in TrueTouch, specifically in mobile handsets, due to seasonal declines, customer program delays and end-of-life actions; second, the expected yearend inventory adjustments at certain end customers; and finally, slightly lower communications revenue impacting our Memory Products Division.

The company expect that fourth quarter revenue could be down in the range of 9% to 11% sequentially from its revised third-quarter revenue estimate, in-line with its typical sequential fourth-quarter decline over the last two fourth quarters.