Trident Microsystems (NASDAQ:TRID) Lowers 4Q10 Revenue Guidance

Trident Microsystems (NASDAQ:TRID) lowered its revenue guidance for the fourth quarter of 2010 on a weak December and canceled orders.

Needham noted, "Last night (Tuesday) after the close, TRID lowered its 4Q10 revenue guidance to $118-$122 million from its previous range of $131-$140 million. The company experienced a soft December month as each of TRID’s major DTV customers (Samsung, Sharp, Philips—all N/R) pushed out orders or outright canceled orders exiting the year. The weakness in demand was primarily centered in the mid-range and high-end DTV segment, in which the channel experienced a glut of excess inventory heading into the Christmas season. The Best Buy (N/R) weakness confirmed this dynamic. Moreover, we expect the inventory purge to continue into 1Q11 and as such, we expect below normal seasonal patterns of 13-15% Q/Q. We are lowering our revenue and EPS estimates for Trident to reflect this slow start of the year. However, given the company’s dominant market leadership in the DTV semiconductor market, attractive risk/reward profile, and new product cycles, we maintains our rating.

"We are lowering our 2011 estimates to $541MM/$ ($0.14) vs. $573MM/$0.15."

Needham & Company maintains a "Buy" rating on Trident Microsystems, which closed Wednesday at $1.63, down $0.28, or 14.66 percent. Needham has a price target of $3 on them.