Monday, fabless semiconductor company Silicon Motion Technology Corp. (SIMO), cut its fourth quarter revenue guidance, citing global economic slow down and weaker demand for its product, while reaffirming its gross margin and operating expenses outlook.
The Taipei, Taiwan-based company said that it now expects fourth quarter revenue to be down 25% - 30% from the previous quarter. Previously, the company had projected revenues to be flat to 10% down from the third quarter of fiscal 2008.
On average seven analysts polled by First Call/Thomson Financial currently expect the company to generate revenue of $41.11 million for the fourth quarter.
Further, the company reiterated its fourth quarter gross margin in the range of 48%-50%, and operating expenses in the range of $15 million - $16 million for the fourth quarter. Operating expenses guidance excludes stock-based compensation, acquisition-related charges, and one-time items.
Commenting on the guidance, the company's President and Chief Executive Officer, Wallace Kou said, "While our Q4 sales are anticipated to be weaker than expected, our storage controller shipment growth for full year 2008 should increase 25% to 35%, which is well within the growth rate range for the flash card industry forecasted by IDC and Gartner."
The company also said that it expects the weaker demand, which had adverse effect on the company's sales, to continue for first quarter.
SIMO is currently trading at $2.72, down $0.25 or 8.42%.
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