Agere Systems (AGR) today updated its outlook for the second quarter of fiscal 2007, primarily as a result of inventory corrections at several leading customers in its Networking and Storage businesses. Based upon recent developments, the company now expects revenues in the quarter ending March, 2007 to be approximately 12 percent lower than the $372 million reported in the quarter ended December, 2006.
The fact that they make those reading the press release do the math to figure out that the new guidance is approximately $332 million (don’t they have engineers who can figure that out) is annoying. Apparently they don’t want to draw attention to how much below the $369 million consensus they will fall. Agere, which is merging with LSI Logic (LSI), saw its share price fall 3.5% on the news. That investors were surprised by the news is surprising to us, since we have been warning of a pending inventory correction across the semiconductor landscape for months. However, the decline could arguably have been much worse had investors not already been expecting something negative.