Intersil Stock Falls 21.4% on Sales News

Intersil Holding Corp.’s stock tumbled Thursday after the Irvine semiconductor maker said sales would fall below analysts’ forecasts in the fourth quarter and be little changed for the following three months.

The shares sank to a 52-week low of $15.94 before rallying to close at $22.81, down $6.19, or 21.4%. The stock was priced at $25 a share when the company went public in February, then climbed as high as $85.25 on March 21.

Intersil, whose chips manage power consumption in personal computers, said a slowdown in the PC market is hurting sales. Gateway Inc., Dell Computer Corp. and Apple Computer Inc. recently said the industry is seeing lower demand.

PC makers had built chip inventories anticipating sales would increase in the second half of 2000.

“That didn’t happen,” said Credit Suisse First Boston analyst Tim Mahon. “Now there’s a tremendous amount of inventory out there. It is hurting [current] absolute numbers, and companies can’t be optimistic in their outlooks.”

Inventory reductions by distributors and a slowdown in the PC market will hurt Intersil’s fourth-quarter revenue, the company said in a statement. The situation will continue in the first quarter.

Mahon said Xilinx Inc., Altera Corp. and LSI Logic Corp. have been similarly hurt.

Intersil said fourth-quarter sales will be about 5% lower than analyst forecasts.

The company makes semiconductors primarily for the PC and wireless-communications markets. Customers include Cisco Systems Inc., Compaq Computer Corp., Dell and Nokia Oyj.

Intersil was expected to log fourth-quarter revenue of $191.2 million and first-quarter revenue of $242.7 million, according to a survey of analysts by First Call/Thomson Financial.

The company said it expects to resume revenue growth in the second quarter.