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Cypress warns on 1Q again
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April 10, 2001: 9:13 a.m. ET
Chipmaker also lowers guidance for 2Q; order cancellations hurts sales
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NEW YORK (CNNfn) - Cypress Semiconductor Corp. became the latest chipmaker to warn on revenue and profits Tuesday, saying that booking cancellations offset almost every new order it received.
The company said it ended the first quarter with revenue of $262 million, rather than the $280 million level that was the company's previous guidance. The company said it took a one-time $25 million hit to revenue from a change in the company's business model. But even without that decline revenue was off 22 percent from the $370 million in sales it had in the fourth quarter of 2000.
It said earnings per share before charges for goodwill would come in the 23 to 26 cent range, rather than its previous guidance of 30 to 34 cents. Analysts surveyed by earnings tracker First Call were forecasting earnings of 30 cents in the period, down from 41 cents a share it posted in the year-earlier period.
It was not the first warning for the period for Cypress, which had seen estimates of EPS of 56 cents before its March 5 warning. The company also issued a warning when it reported fourth-quarter results.
The company also said it believes it will see second-quarter revenue and earnings fall short of forecasts, with revenue in the $200 million to $210 million range and earnings per share before good will of less than 10 cents.
But the company warned it can't even be sure of this lowered guidance.
First Call's forecast calls for second-quarter revenue of $242.8 million, down from $300.8 million a year earlier, and for EPS before goodwill of 25 cents, half of the level posted a year ago.
"The first quarter ended worse than we expected," said T.J. Rogers, the company's CEO. "We barely turned positive on bookings with cancellations offsetting virtually every order we received. It is not clear if our customers reduced the inventory positions they were trying to manage, considering that end demand has really slowed down."
"We still don't have the visibility, but judging from what we've seen in Q1, we are estimating that the second quarter will be another down quarter," Rogers added.
Shares of Cypress (CY: Research, Estimates) fell 90 cents to $14.50 in pre-market trading Tuesday following the warning, after closing down 36 cents in Monday trading. 
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