Why Entropic Communications Shares Dropped

Why Entropic Communications Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Entropic Communications have dropped today by as much as 18% after the company reported earnings.

So what: Revenue in the second quarter totaled $70.6 million, with non-GAAP earnings per share of $0.01. Both figures were slightly ahead of expectations, which were calling for $70.3 million in revenue on a break-even bottom line. Entropic management gave guidance on the call that spooked investors, however.

Now what: Third-quarter sales are expected to be $55 million to $57 million, a 20% sequential decline at the midpoint. This comes at a time that Entropic usually sees stronger sales. CFO David Lyle said that design wins are taking longer to ramp at service providers, and that the set-top box chip business is also seeing some ramp delays until mid-2014. Mizuho Securities and Benchmark have downgraded shares as a result.

Interested in more info on Entropic Communications? Add it to your watchlist by clicking here.

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The article Why Entropic Communications Shares Dropped originally appeared on Fool.com.

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Originally published