Cypress Semiconductor shares dip on 1st-quarter results

It also signaled that it may spin off a major part of its lucrative solar business to Cypress shareholders.

Cowen & Co. analyst John Barton was impressed with sales of $442 million, which were "well ahead" of the average analysts' expectations.

However, he noted that earnings per share, excluding costs and benefits, were below Wall Street expectations and maintained his "Neutral" rating on the stock.

The company's growth was driven by its solar chip component maker SunPower Corp.

Barton welcomed a favorable decision by the Internal Revenue Service on the tax implications of Cypress's plan to sell 44.5 million class B SunPower shares, or 56 percent of the shares outstanding.

Cypress shares earlier in the session traded up 6.9 percent at $30 but were down 69 cents, or 2.5 percent, to close at $27.37. They have traded in the last year between $18.72 and $42.79 and are down 19 percent on the $36.03 price they commanded at the start of the year.