February 20, 2009 / 5:19 PM / 10 years ago

Verigy shares fall on wider-than-expected Q1 loss, bleak outlook

Feb 20 (Reuters) - Shares of Verigy Ltd VRGY.O fell as much as 13 percent to a 52-week low on Friday, a day after the semiconductor testing company posted a wider-than-expected quarterly loss and forecast weak first-quarter revenue, prompting at least one brokerage to downgrade the stock.

Goldman Sachs downgraded the stock to “neutral” from “buy” and said the company’s second-quarter revenue outlook was unrealistic and “it almost ensures a revenue miss.”

Verigy recognized $38 million in orders during the first quarter but is guiding for second-quarter sales of $70 million which is “extremely unrealistic” in the current environment, analyst James Covello wrote in a note dated Feb. 19.

The analyst said he would focus on companies where expectations have been lowered appropriately and whose operating model can generate healthy earnings, such as Lam Research Corp (LRCX.O), Applied Materials Inc (AMAT.O) and Teradyne Inc TER.N.

Verigy forecast a sequential rise or fall of 10 percent in second-quarter revenue on a conference call on Thursday.

For the first quarter, it posted a loss of 70 cents a share, wider than analysts’ average estimate by 3 cents, and revenue of $68 million. [ID:nWNAB4769]

Shares of the company, which competes with Japan’s Advantest Corp (6857.T), were down 91 cents at $7.44 in midday trade Friday on Nasdaq. They touched a 52-week low of $7.26 earlier in the day. (Reporting by Shrutika Verma in Bangalore; Editing by Himani Sarkar)

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