Elantec Semiconductor (Nasdaq: ELNT) plummeted US$8.69 to $22 Wednesday morning after the circuit maker warned its second-quarter sales and earnings would not meet expectations, dueto slumping demand in the personal computing market and the ongoing economic slowdown.
The Milpitas, California-based company estimated that its second-quarter revenuewill be down roughly 20 to 25 percent from its first-quarter figure of $40.71 million.
Elantec said that its PC customers “continue to cancel or reschedulebacklog, causing limited visibility for the company.” While demand for itsDSL communications products remained strong, Elantec said that it will not be able to offsetthe drop in its other market segments.
As a result, Elantec projected that its gross margins will be between 55 and 56percent in the second quarter.
Elantec, which has already started implementing costreductions to counteract the revenue shortfall, said earnings for theperiod should fall in the range of 20 to 22 cents per share, compared with areported 15 cents per share a year earlier.
Wall Street analysts had estimatedElantec would report second-quarter earnings of 38 cents per share,according to research firm First Call/Thomson Financial.
“Despite the softening demand caused by a market slowdown, Elantec remainswell-positioned in the four markets we focus on,” said Elantec presidentand chief executive officer Rich Beyer.
“We believe we will resume strong sales and earnings growth when the economyand our target markets rebound,” added Beyer.