diver of the day
HIFN closed at 74
pre -t rading down some 30 or so
was halted yesterday
-- Hi/fn Inc. (NasdaqNM:HIFN - news), which saw trading in its stock halted Thursday after its share price dropped 30 percent, said two major customers have cut orders for specialty semiconductors for fiscal 2000's first quarter, leading it to expect quarterly revenues of $10 million. The stock closed at 74.
biz.yahoo.com
Thursday October 7, 7:53 pm Eastern Time
FOCUS-Hi/fn says two major customers cut Q1 demand (adds details, analyst quotes, byline, pvs LOS GATOS)
By Therese Poletti
SAN FRANCISCO, Oct. 7 (Reuters) - Chip maker Hi/Fn (NasdaqNM:HIFN - news), whose stock tumbled almost 30 percent on an analyst report on Thursday, said that two major customers had reduced their orders for the company's networking chips.
As a result, the high-flying Los Gatos chip maker said that it now expects its first fiscal quarter revenues, for the quarter ending
Dec. 31, in the range of $10 million.
Earlier on Thursday, Robertson Stephens analyst Arun Veerappan issued a report on Hi/Fn, in which he said he believed that he would not be raising earnings estimates for the company's December quarter, because of weakening orders.
As a result of Veerappan's comments, Hi/Fn's shares, once among the skyrocketing networking chip stocks, took a dive. Hi/Fn shares plunged $30.75 to $74 on the NASDAQ Thursday. Trading in its stock was halted and Hi/Fn said that it made its comments because of the unusual trading in its stock.
''It was cautious, but in hindsight, it was not cautious enough,'' said Veerappan of his earlier HiFn comments. ''Everyone got caught by surprise...I was at $14 million (in revenues) for the September quarter and $15 million for the December quarter.''
Analysts said that Hi/Fn told them on the conference call that its two customers who reduced their orders were Ascend, the networking company now owned by Lucent Technologies Inc. (NYSE:LU - news) and disk drive maker Quantum Corp.
(NYSE:DSS - news) (NYSE:HDD - news). Both companies reduced their orders of chips from Hi/Fn so they could reduce their current inventories.
These two customers make up about 80 percent of Hi/Fn's total sales, which were $12.5 million in its third fiscal quarter ended
June 30.
In its statement, Hi/Fn said its earnings for the fiscal fourth quarter ended Sept. 30, however, will beat financial analysts'
expectations. According to First Call, which tracks analysts' estimates, the consensus is for 37 cents a share.
For its first quarter of fiscal 2000, the consensus on Wall Street was 38 cents a share, according to First Call.
''Two of our major customers, in the widely separate fields of networking and tape storage equipment, have unexpectedly and simultaneously reduced their volume requirements,'' HiFn chief executive Raymond Farnham said in a statement. "The reductions are primarily due to inventory adjustments.
Hi/Fn officials were not available for further comment.
Hi/fn, which said in a statement that it has more than 60 customers, also said it sees no fundamental changes in its business, and its long-term outlook remains unchanged.
Shares of the networking chip maker have indeed been soaring in recent months. Its shares traded at a 52-week high of $151.75.
''It's good technology but the valuation was such that the stock was very vulnerable to any sort of bad news,'' said Steve Shapiro, president of Intrepid Capital Management in New York. ''It's been like an Internet stock.''
my comment
re: divers
on many recently day 5 starts the turn
so am also watching PRSW and WGO |
