After the close of trading yesterday, chip makers Texas Instruments (NASDAQ:TXN) and Altera (NASDAQ:ALTR) both cut their forecasts for the fourth quarter.
Texas Instruments said it now expects fourth quarter revenue in a range of $3.19 billion to $3.33 billion, compared to a prior forecast of $3.26 billion to $3.54 billion.
Earnings per share are now forecast in a range of $0.21 to $0.25 per share, compared to a prior expectation for earnings of $0.28 to $0.36 per share.
Texas Instruments said the reductions are due to broadly lower demand across a wide range of markets, customers and products, except for wireless applications processors.
Also late yesterday, Altera said it now expects fourth quarter revenue to be 13% to 16% lower than third quarter levels, compared to a prior expectation for a 7% to 11% decline in revenue.
Altera said the revenue outlook has deteriorated across all major vertical markets, including both large and small customers.
Texas Instruments shares are falling Friday, as is Altera stock.
Chip investors will want to keep an eye on other stocks in the sector today, as well as chip-heavy ETFs like the Semiconductor HOLDRS (NYSE:SMH), which counts Texas Instruments and Altera among its top holdings, in addition to Intel (NASDAQ:INTC), Applied Material (NASDAQ:AMAT) and Analog Devices (NASDAQ:ADI).
The Proshares Ultra Semiconductors (NYSE:USD) and the iShares PHLX SOX Semiconductor Sector Index Fund (NASDAQ:SOXX) may also be impacted by the forecasts.
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