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Zoran Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Chip designer Zoran (Nasdaq: ZRAN  ) saw its shares plunge as deep as 20.5% below last night's close in intraday trading today.

So what: Last night's third-quarter report was bad, missing analyst targets on both the top and bottom lines. What's worse, management guidance now points to next-quarter sales about 35% below analyst estimates and 37% below the third quarter's results, followed by scary-looking losses.

Now what: Zoran admitted to losing market share in the connected TV and DVD player markets on top of heavy price erosion for the consumer-level end product in those segments. The company is now contemplating new market strategies, and investors are justly nervous about the outcome. Given what Zoran is saying about market trends, it would also behoove owners of Sigma Designs (Nasdaq: SIGM  ) and Trident Microsystems (Nasdaq: TRID  ) to take a second look at their holdings, as they are strong in markets closely related to the digital TV and set-top box sectors.

Interested in more info on Zoran? Add it to your watchlist by clicking here.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Sigma Designs is a Motley Fool Rule Breakers choice. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is investors writing for investors.

Read/Post Comments (3) | Recommend This Article (2)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 26, 2010, at 12:30 PM, RiskyBuziness wrote:

    This guy can't resist a dig at TRID at any possible opportunity can he? If Zoran lost market share, gee, I wonder who GAINED MARKET SHARE? Could TRID be the winner, not the loser, here?

    WHAT YOU NEED TO KNOW: For those who didn't see his post on TRID, please read, you should see the complete perspective on this author.

  • Report this Comment On October 26, 2010, at 12:33 PM, RiskyBuziness wrote:

    WHAT YOU NEED TO KNOW: The unmentioned competitor. BRCM - Broadcom Corporation - is up 19.72% YTD. Zoran might be falling; the sector's sky is not.

  • Report this Comment On October 26, 2010, at 2:34 PM, penny4urstocks wrote:

    Also what you need to know before writing such an article is that this is at least the 3rd straight quarter ZRAN has admitted its losing market share.

    But after reading your july 26 article I see why you blame the sector and not your ZRAN.

    In that article "What the Heck Does Conexant Do?", you stated, "If you asked me at gunpoint why anybody would pick a Conexant chip over Marvell or Zoran, I'd probably be praying for my life really quick."

    Since that article

    CNTX is down %40

    ZRAN is down %30

    TRID is UP %60

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