Analysts cut Verigy estimates on weak outlook

The company, which makes semiconductor testing equipment, swung to a loss in its fiscal fourth-quarter on one-time charges and saw a steep decline in new orders. Verigy said it lost $36 million, or 60 cents per share, after a profit of $32 million, or 52 cents per share, in the year-ago period.

Excluding one-time items, the company said it earned 14 cents per share, beating average analyst estimates by a penny, according to Thomson Reuters. Analysts typically exclude one-time losses or gains from their estimates.

Revenue dropped 28 percent to $150 million from $209 million, missing the average Street estimate of $159 million.

Verigy said it expects to lose 36 cents to 46 cents per share on revenue of $95 million to $110 million for the quarter ending Jan. 31. Analysts, on average, expect a 13 cent loss on $123.3 million in revenue.

"The deteriorating global economy has caused significant turmoil in the semiconductor industry and this has affected everyone, including Verigy," the company's chief executive, Keith Barnes, said in a statement.

Stifel Nicolaus & Co. analyst Patrick Ho told investors in a note, "We were not dramatically surprised by either the results or the outlook, which as we anticipated, was grim and reflective of current market conditions."

He has a "Buy" rating on shares but cut his price target for the stock to $13 from $18 and now anticipates an 88 cents per share loss for fiscal 2009, from a previous estimate of 22 cents. Analysts, on average, predict a 5 cent loss.

Thomas Weisel Partners Doug Reid, who has an "Overweight" rating on the shares, also cut his estimates, noting that new equipment orders declined 50 percent from the previous quarter to $82 million. He cut his price target to $16 from $20 and his 2009 earnings per share estimate to a 69 cent loss from a 93 cent profit.