Cypress Semiconductor Corp. (CY) Thursday reported a wider loss for the first quarter, hurt mainly by decline in sales at its Programmable Systems Division and lower margins, notwithstanding an increase in demand from China.
Excluding items, Cypress posted an adjusted profit that declined from last year, but topped Wall Street estimates, with revenues also surpassing expectations.
Cypress said the quarterly results were the culmination of a business slump that emerged last year and the company sees solid sequential revenue growth in the second quarter for all business divisions.
The results dampened investor sentiment and shares of the company lost more than 9 percent in early noon trade on the Nasdaq.
The San Jose, California-based company reported first-quarter net loss of $28 million or $0.19 per share, compared to a net loss of $19.5 million or $0.13 per share last year.
Results for the quarter include, among other items, stock-based compensation expense of $12 million and restructuring charges of $11 million. The prior year recorded stock-based compensation of $28 million.
Excluding items, adjusted earnings for the quarter were $4.6 million or $0.03 per share, compared to $20.5 million or $0.12 per share last year.
On average, 13 analysts polled by Thomson Reuters expected earnings of $0.01 per share for the quarter. Analysts' estimates typically exclude special items.
Cypress makes the processors and chips that go into computers, phones, and other integrated electronic devices. Revenues for the quarter slid 7 percent to $172.7 million from $185 million a year ago.
Analysts on consensus estimated revenues of $167.34 million for the quarter.
Among segments, Programmable Systems Division sales fell 18 percent from a year ago, while Memory Product Division sales were flat. Data Communication Division sales climbed 4 percent, and Emerging Technologies Division sales jumped 30 percent.
Sales in the Americas edged down 2 percent from last year, and Europe and Japan lost 1 percent each. Sales in China and rest of the world were up 4 percent.
Results were impacted by gross margin that declined to 45.8 percent from 49.6 percent in the prior year.
The company's stock is trading at $9.93, down $1.03 or 9.38%, on a volume of 5.7 million shares.
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