Sector Snap: Chip shares slip as Cirrus posts 4Q loss
NEW YORK—Semiconductor stocks on Friday gave back some of their gains from the day before, as Cirrus Logic Inc. shares plunged following a first-quarter loss.
The chip sector, as measured by the Philadelphia Semiconductor Index, fell 5.04 points to 395.25 in afternoon trading.
Shares of Austin, Texas-based Cirrus plunged more than 20 percent Friday after it swung to a fourth-quarter loss on the cost of closing down a China-based subsidiary and other expenses.
Shares fell $1.57, or 21.1 percent, to $5.86. They have traded in the last year between $4 and $8.87.
Elsewhere, shares of Magma Design Automation Inc. also plunged after the microchip design software company said it expects first-quarter profit well below Wall Street estimates.
The San Jose, Calif.-based company said it anticipates a first-quarter profit of 7 cents to 9 cents per share, excluding one-time costs and gains. Analysts polled by Thomson Financial forecast a profit of 14 cents per share.
Shares dived $2.95, or 30.8 percent, to $6.62. They earlier hit a year low of $6.20 after trading in the last year between $8.48 and $15.70.
Elsewhere, Wachovia Capital Markets analyst David Wong said chip market leader Intel Corp. remained his top pick in the sector.
Wong said Intel had a dominant position in the "attractive" personal computer microprocessor market.
It also had a strong lineup of products that will help it gain microprocessor market share, while cost-cutting and divestitures should help improve profit margins, he said.
Intel shares were unchanged at $23.29 in afternoon trading.
Meanwhile, Broadcom Corp. shares fell 69 cents, or 2.6 percent, to $26.19.
