By Kristin Jones
PMC-Sierra Inc. (PMCS) swung to a third-quarter loss as the chip
maker's revenue dropped on broadly weaker demand for its
semiconductors.
PMC-Sierra, which makes chips for broadband communications
infrastructure, high-bandwidth networks and other applications, has
posted weak core earnings in recent years. Shaky demand among the
company's end markets has dashed hopes for a speedy late-2012
recovery.
Chief Executive Greg Lang said Monday that broad economic
uncertainty weighed on infrastructure purchases in every geography
and market segment.
PMC-Sierra came under pressure earlier this year from activist
investor Relational Investors, which controls a 8.6% stake,
according to FactSet, to either get bigger or sell itself.
Relational and its boss, Ralph Whitworth, are best known for
pushing big changes at Home Depot Inc. (HD), Occidental Petroleum
Corp. (OXY) and other companies.
The company reported a loss of $274.4 million, or 31 cents a
share, compared with a year-earlier profit of $47.3 million, or 20
cents a share, a year earlier. Excluding stock-based compensation
and other items, per-share earnings fell to 10 cents from 18
cents.
Revenue decreased 24% to $131.7 million.
The company in July had projected adjusted per-share earnings of
nine cents on revenue between $130 million and $138 million.
Gross margin widened to 70.4% from 69.6%.
Write to Kristin Jones at kristin.jones@dowjones.com
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