Integrated Device Technology, Inc.; today announced during its regular mid-quarter investor teleconference that it has reduced its revenue and earnings outlook for the quarter ending July 1, 2001.
Based on recent and projected order rates from customers, IDT management now expects revenues in the first quarter of IDT's fiscal 2002 to be down approximately 44% from prior quarter revenues of approximately $213 million, to approximately $120 million.
The principal reason for the estimated change in the current quarter's revenue outlook is ongoing inventory reductions byits customers, the company said.
IDT shares, which have fallen for seven straight sessions, continued to slide in after-hours trade in reaction to the warning. The stock dropped to $33.8 on Instinet, its lowest level since 25 April, down from a Nasdaq close Thursday of $36.64.
Analysts who follow the company had expected revenues of near $153 million, according to First Call/Thomson Financial.
The warning from IDT comes as investors and analysts debate whether the current quarter represents the low point for orders and sales in the semiconductor industry or whether the steep downturn will continue into the calendar third quarter. Although semiconductor shares began to recovery in early April, the sector has been hit by profit-taking amid caution those gains had priced in too strong a recovery.
IDT's sales in the quarter ended March 1 were down 24 percent from the prior quarter, a downturn the company attributed to the first signs of a slowdown by communications equipment manufacturers.
"IDT continues to see the impact of slow end-market demand and the industry-wide inventory correction which began in the fourth quarter of calendar 2000," said Jerry Taylor, IDT's president and chief executive officer, in a released statement. "The effect on IDT's current quarter revenue from customer inventory reduction programs, particularly at North American OEMs and electronic
manufacturer service industry (EMSI) customers, has been more significant than previously expected.
"The revenue decline from last quarter's rate appears to be far greater than customers are experiencing in their businesses. This indicates that our products are being consumed by our customers at higher rates than our own current quarter revenue shipment rate due to these inventory conditions."
"We are greatly encouraged by the number of design wins associated with both our existing product families and the new families of communications ICs introduced in the last six months," said Taylor. "As existing component inventories are depleted, orders related to current production systems should pick up. When combined with new product designs ramping into production in future quarters, I believe there will be significant opportunity for IDT to resume solid revenue
Reuters contributed to this report.