FormFactor falls after it reports weak 1Q profit

Shares of chip testing company FormFactor Inc. fell heavily Wednesday after it reported first-quarter earnings well below Wall Street expectations.

Oppenheimer & Co. analyst Gary Hsueh said in a note to investors that management is now "just a bystander as revenue continues to implode."

Hsueh said that the company's core DRAM testing business was responsible for its fall in revenue.

DRAM memory chips store information on personal computers and other electronic devices. Their prices have slumped in the past year because of oversupply, forcing chip makers to cut back on purchases of testing equipment and other capital equipment.

Hsueh was even less impressed with FormFactor's second-quarter outlook.

"Despite claims of regaining market share ... second-quarter outlook is even more dismal," he said.

FormFactor shares fell 80 cents, or 4 percent, to close at $19.27. They have traded in the past year between $16.17 and $48.48.