Why Cypress Semiconductor Shares Plunged

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What: Shares of Cypress Semiconductor (NASDAQ: CY  ) have plunged today by as much as 10% after the company reported earnings.

So what: Revenue in the first quarter came in at $172.7 million, topping the consensus estimate of $167.3 million. Cypress posted adjusted net income of $4.6 million, or $0.03 per share. That was also ahead of the $0.01 per share that investors were braced for. Shares responded favorably initially, but then Cypress provided guidance on its conference call and sent investors fleeing.

Now what: Second-quarter sales are expected to be in the range of $178 million to $186 million, meaning the company would have to stretch to hit the upper end in order to beat the consensus of $183.1 million. Earnings per share are guided to $0.06 to $0.08, shy of the $0.09 per share forecast. Profitability is also expected to suffer, with Cypress expecting gross margin to fall to 51% as the product mix shifts to lower-margin products.

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

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  • Report this Comment On April 19, 2013, at 8:22 AM, rsinj wrote:

    "Second-quarter sales are expected to be in the range of $178 million to $186 million, meaning the company would have to stretch to hit the upper end in order to beat the consensus of $183.1 million. Earnings per share are guided to $0.06 to $0.08, shy of the $0.09 per share forecast."

    Not a stretch nor shy of anything. I guarantee that by the time of the next earnings announcement, all the estimates will have been lowered sufficiently to allow the company to beat them.

    Clearly you haven't been at this game very long, have you?

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