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SemiLEDs Corp (NASDAQ:LEDS), a manufacturer of LED chips and components, said Tuesday that it swung to a second quarter loss, falling far below analyst estimates.

The Taiwan-based company's shares sank more than 17% on Tuesday to close at $11.96.

For the three months ending February 28, 2011, the company posted a net loss of $1.2 million, or $0.05 per share, compared to a net income of $1.9 million, or $0.04 per share, in the prior year period.

On an adjusted basis, net loss for the second quarter of fiscal 2011 was $0.7 million, or a loss of $0.03 per share. Analysts expected positive earnings of $0.08 per share for the quarter.

Revenue during the period rose 30% year-over-year to $10.0 million, but still fell below the $11.22 million analysts had estimated.

Chairman and CEO Trung Doan said:

While we believe the long term market opportunity of LEDs has not changed, the quarter did not meet our expectations relative to revenue, EPS or gross margin due to the aggressive, competitive pricing environment and our decision to preserve our market share.

Gross margin for the second quarter was 23%, down from 41% a year earlier, impacted by pricing pressure, lower capacity utilization as well as a shortage in metal compounds, the company said.

Efforts to improve our gross margin include taking actions to improve our yield, transition to four inch wafers in our Taiwan facility, as well as ramping volume production of our new high brightness LED chip, I-Do,

added Doan.

Looking ahead, the company said it expects a net loss in the range of $2.6 to $2.0 million, or $0.10 to $0.07 per share in the third quarter, on revenues of between $6.0 to $7.0 million. Analysts had anticipated earnings of $0.14 per share on revenues of $13.88 million for the three month period ending May 31.

SemiLEDs' LED chips and components are used primarily for lighting applications, including street lights and commercial, industrial and residential lighting. At year-end, the company had cash and equivalents of $102.6 million.

Disclosure: None

Source: Cash Rich but Margin Poor, SemiLEDs Disappoints