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What: Shares of analog-chip-maker Micrel
So what: Today looks like the beginning of a possible trend in technology of lowered revenue and profit forecasts directly tied to the aftereffects of the earthquake in Japan. Micrel warned that it anticipates revenue to fall 10% to 11% for the first-quarter, considerably higher than its previous guidance of a 2% to 6% fall. Earnings are also expected to come in under expectations; $0.13-$0.14 versus prior expectations of $0.17-$0.19. The company cited weakness from a key Korean customer as the cause for the revised guidance.
Now what: Micrel derives about one-eighth of its revenue from Korea. Of Micrel's two Korean customers -- LG Electronics and Samsung -- it's Samsung that likely caused this earnings revision. Samsung dropped its own revenue forecast last week on weakened TV sales and supply chain disruptions caused by the earthquake in Japan.
What we need to take from this is the understanding that earnings revisions are going to become the norm this quarter and to simply take them in stride. Adobe Systems
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