Microtune plunges as analyst downgrades on 2Q outlook
PLANO, Texas—Shares of TV chip company Microtune Inc. plunged to a year low Tuesday on Wall Street reaction to its second-quarter outlook.
The shares fell 57 cents or 14.6 percent to $3.33. They earlier hit a year low of $3.20 after trading in the last year between $3.37 and $6.88.
Roth Capital Partners analyst Jay Srivatsa downgraded the company to "Hold" from "Buy" on its mixed first-quarter results and "disappointing" second-quarter outlook.
He was particularly disappointed with the company's performance in the market for converter boxes, which prepare standard analog TVs to receive digital signals.
"We are disappointed that Microtune is unable to gain meaningful traction in the converter box market. Despite being designed into eleven set top boxes for the U.S. digital converter box deployment, the company lowered its projected revenues" he said.
He lowered his second-quarter earnings-per-share estimate to 3 cents per share from 5 cents per share, excluding one-time cost and gains.
Srivatsa also halved his 12-month price target to $3.50 from $7. The new price target is a 5 percent premium on Tuesday afternoon's trading price.
