Aug. 8 (Bloomberg) -- EZchip Semiconductor Ltd., an Israeli maker of network processors, sank the most in four years in U.S. trading after its forecast for third-quarter revenue fell short of analysts’ estimates.
EZchip slumped 25 percent to $29.43 by 12:46 p.m. in New York, the most since October 2008. Its Tel Aviv shares slid 1 percent to 151.3 shekels, or the equivalent of $37.91.
The Yokneam, Israel-based company forecast third-quarter sales of $8 million to $10 million, lower than the $17.9 million mean estimate of seven analysts surveyed by Bloomberg.
“It is a very disappointing short-term guidance that delays our expected revenue ramp,” EZchip Chief Executive Officer Eli Fruchter said in a statement today.
The global economic slowdown reduced the capital spending of major telecommunication carriers, EZchip said in a conference call with investors today. The company’s three biggest customers are Cisco Systems Inc., ZTE Corp., and Juniper Networks Inc., it said.
“The third quarter guidance is causing share prices to decline,” Gary Mobley, an analyst at Benchmark Co., said by phone from St. Louis today. “The reason for the substantial disappointment is because it relies on three customers for 75 percent of its revenue.”
The company reported second-quarter adjusted earnings of 29 cents per share, surpassing the 26-cent mean estimate of nine analysts surveyed by Bloomberg.
To contact the reporter on this story: Sridhar Natarajan in New York at email@example.com
To contact the editor responsible for this story: Tal Barak Harif at firstname.lastname@example.org