NEW YORK (AP) — Shares of chip designer Broadcom slipped early today after the company posted a fourth-quarter loss and said sales for the period ending in March will miss Wall Street estimates.
Shares fell $1.02, or 5.9 percent, to $16.41 in premarket trading.
Late Thursday, the Irvine, Calif., maker of chips posted a loss of $159.2 million for the fourth quarter, reversing a year-ago profit.
Sales beat Wall Street forecasts, but the company's revenue projection for the current period came between $800 million and $875 million — below the average estimate of $953 million offered by analysts surveyed by Thomson Reuters.
Analysts still see Broadcom as likely to outperform when chip demand pulls out of the downturn, which hit industrywide during the final three months of last year.
"(Broadcom) is beginning to show earnings leverage and is well positioned for a return to revenue growth and profitability" in the second half of 2009, Jefferies & Co. analyst Adam Benjamin told clients in a note Friday.
Benjamin has a "Buy" rating on the shares.
Thomas Weisel Partners analyst Kevin Cassidy said in a note that "Broadcom management has shifted to a cash flow protection strategy from a profitable growth strategy," with the goal in mind of cutting operating expenses to support cash flow.
But he reiterated an "Overweight" rating on shares, adding, "we expect the company's strong balance sheet can weather this downturn and its new product lineup will return the company to profitable growth faster than most" in the sector.