Trident Plunges On Competition From Low End TV Makers

Trident Microsystems (TRID) shares were in freefall Friday morning after the company Thursday night issued a grim fourth quarter forecast.

For the third quarter, the maker of chips for digital TVs reported third quarter revenue of $88.2 million, with pro forma EPS of 38 cents. The Street had been looking for $90.2 million and 32 cents.

The trouble came with the fourth quarter outlook: the company now sees revenue of $70 million to $72 million, far below the Street consensus of $91.66 million. Trident said the LCD TV market is segmenting between high-end “full HD” models sold in specialty retailers and “most cost-sensitive WXGA-driven TVs” found in club channels and discount chains.

Trident says it is strong in the high end TVs, but that “our share in the latter category has begun to face challenges from new entrants and off brands who have begun to challenge branded TVs…we expect we may face challenges and competition in the less profitable WXGA markets.”

The company said it expects to resume revenue growth in the 2008 second half.

TRID 1-yr chart:

Comments

[globalview99:]

That was one horrific plunge reflecting a horrific forecast in revenue for the next quarter.

It challenges the imagination to contemplate a sequential 20% overall drop in revenue due to low-end product competition in the midst of favorable seasonal trade winds.

2007 Oct 28 01:38 PM