Out of the Gate: Sigma Designs plunges

Shares of Sigma Designs Inc. plunged at market open Friday after the semiconductor company said its fiscal first-quarter profit fell 13 percent, missing Wall Street estimates.

Shares tumbled $3.43, or 15.7 percent, to $18.48. The stock has traded between $15.31 and $73 over the last 52 weeks.

Late Thursday, the Milpitas, Calif.-based company said its quarterly profit declined to $4.7 million, or 16 cents per share, which the company attributed to an external inventory correction.

Adjusted for one-time charges, the company reported income of 40 cents per share.

Analysts expected earnings of 42 cents per share, according to a Thomson Financial poll.

Roth Capital Partners analyst Jay Srivatsa downgraded Sigma to "Hold" from "Buy," citing product delays, uncertainty about future performance and the company's expectation that it will lose Blu-ray market share. He also slashed his price target to $20 from $32.

Separately, Piper Jaffray's Gary W. Mobley lowered his price target to $19 from $25, and said earnings estimates could be "overly optimistic" depending on competitor Broadcom Corp.'s performance in its markets.