OmniVision shares tumble after it warns third-quarter revenue will fall short of expectations

OmniVision shares fall on Q3 revenue warning

PHILADELPHIA — Shares of OmniVision Technologies Inc. fell Tuesday after the company warned that its fiscal third-quarter revenue will fall short of expectations.

The maker of chips used in digital cameras, camera cell phones and other devices said late Monday that it expects revenue to range from $145 million to $160 million in the quarter. That’s lower than the $168.6 million expected by analysts polled by Thomson Reuters.

OmniVision also projected earnings of 14 cents per share to 24 cents in the third quarter, compared to the 20 cents expected by analysts.

Its shares ended Tuesday down $1.56, or 11 percent, to $12.40.

The company said a shift in sales to reflect a higher mix of customers in North America and Japan will move business more toward the second quarter instead of the third.

Morgan Keegan analyst Harsh Kumar said the outlook “was frankly a little disappointing.”

But Kumar raised his earnings and revenue estimates for the current 2010 fiscal year because OmniVision’s second quarter, which ended Oct. 31, beat expectations.

OmniVision earned $8.1 million, or 16 cents per share, in the second quarter compared to a loss of $5.3 million, or 10 cents per share, a year earlier. Excluding one-time costs for stock-based compensation, the company’s adjusted profit was 27 cents per share.

Analysts expected 16 cents per share in profit. They typically exclude one-time costs.

Revenue rose 12 percent to $183.3 million from $163.9 million.

Kumar raised his 2010 profit estimate to 57 cents per share on revenue of $604 million from 43 cents and $594.4 million. But he scaled back his 2011 forecast to 89 cents per share in profit from 91 cents, and revenue of $680.3 million from $705.8 million.

Wedbush analyst Betsy Van Hees also upped her 2010 forecasts. While OmniVision’s outlook may not impress, she said it was due to seasonal patterns. Van Hees said she sees the company benefiting from market-share gains and ramp up of smart phones.

She raised her 2010 revenue estimate to $605.3 million from $600 million, and earnings per share to 58 cents from 46 cents.