What: Shares of Entropic (UNKNOWN:ENTR.DL) got crushed today by as much as 16% after the company reported earnings.

So what: Revenue in the first quarter added up to $74.5 million, which translated into non-GAAP net income of $300,000. That rounds to $0.00 per share, which was in line with consensus forecasts. CEO Patrick Henry acknowledged that 2013 will be a transitional year for the company.

Now what: Entropic continues to make progress with strategic goals like improving margins and scoring design wins at top tier customers. Needham subsequently downgraded Entropic from "buy" to "hold." The analyst cited excess inventory that's taking longer to work through, while rivals are gaining market share. Entropic will likely face numerous headwinds in the near term.

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