Another victim of inventory, Conexant Systems Inc. today announced that it expects revenues for its fiscal Q4 to be down by more than $50 million sequentially.

Expected results in a range of $210 million to $215 million compare to revenues of $267.6 million for the quarter ended July 2.

The lower results for the quarter ending Friday, Oct.1, are due primarily to excess channel inventory in Asia that is a result of lower-than-expected demand, the company said. Conexant anticipates that pro forma non-GAAP earnings per share will range from a loss of 2 cents to a loss of 1 cent, compared to the guidance range of pro forma non-GAAP income of flat to 2 cents per share established in July.

"Conexant's lowered fourth fiscal quarter expectations are a direct result of excess channel inventory in our service-provider and PC-related businesses," said Armando Geday, Conexant's CEO, in a statement. "Ongoing softness in customer demand, reduced product lead times and price erosion also resulted in weakness in our turns business."

The company is repeating its fiscal Q3 behavior, when it lowered its guidance just as the quarter closed. That was followed by a 300-job cut in August on weakness in Conexant's WLAN business.

"For our fourth fiscal quarter, we expect gross margin to be at the low end of the range of 40 to 42 percent that we anticipated in July, and we expect to reduce pro forma operating expenses by considerably more than the $3 million to $4 million we anticipated in July, to a level approaching $95 million from $104.4 million last quarter," Geday concluded.

By: DocMemory
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