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GPS chipmaker SiRF Technology Holdings (Nasdaq: SIRF) reported 2nd quarter earnings on Tuesday. The stock has gone down from the mid 23 range to now mid 19s since the earnings.

Here are the highlights:

• Net Revenues for the 2Q were 70.6 million - Increase of 23.4% YoY.
• Gross Margins declined to 54.6% from 56.3% a year ago.
• Net Income came in at $2.1 million or $0.04 per diluted share compared to $1.7 million or $0.03 per diluted share a year ago.
• The company has $211 million in total cash.
• The company lowered its full year 2007 revenue guidance to $300 - 310 million from $320 - 330 million.

Other key highlights:

• Revenue in wireless growth slower than expected.
• SiRF, Intel (Nasdaq: INTC) to jointly develop and market products for Mobile Devices.

Analyst Opinions (post 2Q earnings):

• RBC Capital Markets: ‘Outperform’ but target price reduced to $26 from $30
• Montgomery & Co: ‘Outperform’ but target price reduced to $25 from $32

The wireless shortfall was blamed on Motorola (NYSE: MOT) which has really been struggling of late. It recently even gave away its number two wireless handset spot to Samsung.

SiRF is still in a great position and is a leader in its field. We are still further away from the wireless/handset GPS promise but not too far away. Wouldn’t it be nice to have built in GPS in the next version of the iPhone? Although, there will be more competition in this sector for SiRF as compared to the PND sector the opportunity is much bigger as well. Although, its hard to call a bottom it wouldn’t be too bad to start a small position here. SiRF could also be an acquisition target now that its privately held competitor, Global Locate, has been acquired by Broadcom (Nasdaq: BRCM).

I recently got back into SiRF (pre-earnings) by buying JAN 08 calls and bought AUG 07 puts right before earnings to proctect myself. I am glad I bought the PUTS and I think I should be fine by the time JAN 08 rolls around. I previously got out SiRF back in December 2006 and said that I still like the GPS sector and am looking into Navteq (NYSE: NVT). As it turns out I kept looking at Navteq but never bought it. At that time Navteq was trading in the mid 30’s and now as we all know, it's near the mid 60’s. Yes, of course, I am looking back at Navteq again for a good entry point.

Full Disclosure: I own long-term calls and short-term puts in SIRF.

SIRF 1-yr chart:

SIRF 1-yr chart

Source: Now's the Time To Get Back In On SiRF