KFDA - NewsChannel 10 / Amarillo, TX: newschannel10.comZoran shares take a hit after weak 4Q outlook

Zoran shares take a hit after weak 4Q outlook

NEW YORK (AP) - Shares of Zoran Corp. plunged Tuesday after the chip maker gave a fourth-quarter outlook short of Wall Street's expectations due to weak consumer spending.

Shares of Zoran fell $1.11, or 11 percent, to $9.06 in afternoon trading. In the past 52 weeks, the stock has traded between $5.07 and $12.27.

Zoran, based in Sunnyvale, Calif., said late Monday it expected to lose up to 7 cents per share in the fourth quarter, excluding items. Analysts project a profit of a penny per share, according to a Thomson Reuters survey. Zoran's sales forecast of $91 million to $95 million fell short of analysts' average estimate of $100.8 million.

Lazard Capital Markets analyst Daniel Amir downgraded Zoran to "Hold" from "Buy" following the announcement. Investors may be especially disappointed because there have been signs that the tech industry is recovering from the economic slump, especiallywhen it comes to consumer spending.

"Our thesis in the past year has been to own Zoran shares due to their attractive valuation and the expected consumer recovery," the analyst wrote in a note to investors. "We believe that without a new consumer catalyst these are no longer drivers to own the stock."

The analyst called Zoran's guidance disappointing, though noted that the third quarter was solid.

Amir said its weak outlook is related to lighter-than-usual ordering for digital TV sets that use the company's products in the U.S.

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