PMC-Sierra Shares Slide on 3Q Profit Drop Thursday October 20, 2:32 pm ET PMC-Sierra Shares Down 9 Percent on Drop in Third-Quarter Earnings, Stock Downgrade
NEW YORK (AP) -- PMC-Sierra Inc. shares slid more than 9 percent Thursday after it reported its third-quarter profit declined and sales missed analysts' consensus estimate, triggering a stock ratings downgrade from one bank. ADVERTISEMENT
The stock fell 78 cents, or 9.8 percent, to $7.15 in afternoon trading on the Nasdaq, erasing its prior year-low of $7.42. The stock, which saw a high of $12.37 in December, has shed 36 percent since the start of the year.
PMC late Wednesday reported net income of $5.9 million, or 3 cents per share, down from $6.3 million, or 3 cents per share, a year-earlier. Excluding charges, income jumped 97 percent to $13.5 million, or 7 cents per share, versus $6.9 million, or 4 cents per share, last year.
Adjusted income, the company said, excludes a $5.4 million restructuring charge, $3.4 million in currency exchange losses on Canadian taxes, and $1.2 million in income tax effects related to these adjustments.
Revenue climbed 7 percent to $76.2 million versus $71.2 million last year.
Analysts surveyed by Thomson Financial were looking for a 6 cent per share profit, before charges, on sales of $77.3 million.
Global Equity Research downgraded the stock to "Neutral" from "Overweight" on predictions for slower revenue growth in the coming periods. Global Equity, a division of Global Crown Capital LLC, said it now expects fourth-quarter sales to grow 1 percent to five percent quarter-over-quarter, down from its original 8 percent estimate.
The investment house also lowered its fiscal 2006 estimates to adjust for the sales decline. Earnings per shares is expected to come in at 35 cents on $347 million in sales versus its previous forecast of a 40 cent per share profit on sales of $375 million.
Prudential Equity Group LLC cut its price target on the shares to $7 from $9.
CIBC World Markets, however, remained bullish and raised its rating to "Sector Outperform" from "Sector Perform."
Market Data 
Markets 
AI
