PMC Sags on Earnings Update
PMC stock was down $1.35 (14.9%) to $7.69 by midday.
Late yesterday, the company announced that for its quarter ended July 2, it expects to be "at the midpoint of the revenue range" of $108 million to $112 million it had forecast earlier. Alas, analysts had expected PMC to report revenues of $114 million, according to Reuters Research .
The figures exclude revenues from recently acquired PON-chip vendor Passave, which will contribute another $8.5 million to $9 million in the quarter, PMC said yesterday. (See PMC Preps PON Plans.)
At the same time, PMC said CFO Alan Krock will step down "for personal reasons following a reasonable transitional period," the company announced after the market closed yesterday. PMC didn't specify a date of departure for Krock, who joined the company in 2002. (See PMC CFO Departing.)
Now, PMC does not number among the companies being investigated for stock-options practices. But with the options scandal hovering over the tech sector, it's possible some investors are feeling skittish -- and a CFO departure is often taken to be a sign of bad news. (See Infinera's CFO Quits.)
Suspicion of options back-dating has caused trouble for several of PMC's competitors -- most notably Vitesse Semiconductor Corp. (Nasdaq: VTSS), which recently fired its CEO, CFO, and former CFO after conducting an internal investigation. (See Vitesse Execs Get the Axe.)
Other chip companies being investigated by the SEC and/or federal prosecutors include Applied Micro Circuits Corp. (Nasdaq: AMCC), Broadcom Corp. (Nasdaq: BRCM), and Marvell Technology Group Ltd. (Nasdaq: MRVL). (See AMCC Gets Subpoenaed, SEC Informaling Broadcom , and Marvell Joins Options Fun.)
— Craig Matsumoto, Senior Editor, Light Reading