(Reuters) - Chipmaker Entropic Communications Inc said it was exploring strategic options amid order delays that it warned would continue through the year, hurting the company’s efforts to turn a profit.
Entropic, which did not say what those options were, also lowered its revenue forecast for the current quarter blaming slower spending by telecom and cable customers in light of several big mergers.
The company’s shares rose as much as 11 percent but lost some of those gains to trade 3.2 percent higher at $2.84 by midday.
“We expect continued softness in the fourth quarter as we are again seeing new product deployment delays,” Chief Financial Officer David Lyle said in a statement on Tuesday.
Entropic supplies chips for set-top boxes for cable and satellite TV providers such as Comcast Corp and Verizon Communications Inc.
“The timing of the announcement is a little discouraging,” BWS Financial analyst Hamed Khorsand said.
“The company has been going through a transition for several quarters and management has been continuously suggesting (fourth quarter) would be the turnaround point.”
Entropic, which reported declining revenues in seven of its previous eight quarters, lowered its revenue forecast for the quarter ending Sept. 30 to $43 million, from its earlier outlook of between $49 million and $51 million.
Also, the company said it now expects an adjusted loss of 15 cents per share for the third quarter, worse than its earlier loss forecast of 11 cents per share.
Entropic said it had engaged Barclays to help explore strategic options and that it had not set a timetable for completion of the process.
The company set in motion a restructuring plan in June, saying it would close and consolidate several offices globally, impacting 23 percent of its workforce and helping it save $24 million annually.
Reporting by Lehar Maan in Bangalore; Editing by Feroze Jamal