(Reuters) - OmniVision Technologies Inc gave a third-quarter outlook below market estimates, hurt by a cutback in orders for sensors used in smartphones, sending its shares down 12 percent in extended trade.
"Late in our second quarter we encountered an unanticipated cutback in orders from major customers for sensors that were designed into consumer devices," Chief Executive Shaw Hong said on a conference call with analysts.
OmniVision, which posted a better-than-expected second-quarter results, earlier this month slashed its revenue forecast for the quarter, sparking fears that it may have lost a key contract from top customer Apple Inc.
OmniVision supplies back-lit image sensors that are used in most Apple products, including the iPhone 4, and Motorola's Droid series of handsets.
However, several companies, including Sony, have launched similar sensors, and some technology blogs have identified the Japanese company as a supplier for iPhone 4S -- the latest iPhone with an upgraded 8 megapixel camera.
OmniVision pioneered imaging sensors that use both sides of the chip to deliver better quality in a smaller-sized camera, a product segment that Sony entered about a year ago.
OmniVision, which also supplies for HTC Corp's Evo, sees third-quarter adjusted earnings of 5-17 cents per share on revenue of $160-180 million.
Analysts, on average, were expecting earnings of 26 cents per share on revenue of $201.4 million, according to Thomson Reuters I/B/E/S.
For the second quarter, the company earned 48 cents per share, excluding items, while analysts were expecting 32 cents.
Revenue fell 9 percent to $217.9 million.
The company said its notebook and webcam segment saw a decline in demand due to a slowdown in the market and supply-chain effects from the Thailand flooding.
Shares of OmniVision fell to $9.83 in after-hours trading after closing at $11.19 on Tuesday on Nasdaq.
Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Maju Samuel