NEW YORK (AP) -- Shares of Volterra Semiconductor Corp. fell Tuesday after the company reported disappointing earnings amid sluggish sales growth and rising costs.
THE SPARK: After the markets closed Monday, Volterra Semiconductor Corp. announced that in the second quarter it earned $6 million, or 22 cents per share, compared with $5.3 million, or 20 cents per share, a year earlier.
The company said that excluding stock-based compensation expenses, it would have earned 32 cents per share. Analysts surveyed by FactSet were looking for 35 cents per share.
Revenue grew 4 percent to $43.6 million, below the $44.3 million forecast by analysts.
Research and development costs climbed to $11 million from $9 million. That pushed total operating expenses up 5 percent, to $19.1 million from $18.2 million a year ago.
THE BIG PICTURE: Volterra makes low-voltage power-management chipsets for computers and networks. Sales softened as the sluggish economy began to affect manufacturer's orders late in the second quarter. The company said it is increasing market share for new servers and notebook computers.
THE ANALYSIS: JMP Securities lowered its estimates for company profits in fiscal 2012 and 2013, but analyst Alex Gauna said the drop in share price created a buying opportunity for investors.
Although the company gave a disappointing outlook, Gauna said it was in better shape than most peers and would benefit from Microsoft Corp.'s new Windows 8 operating system and seasonal improvement in the fall.
But Stifel Nicolaus analyst Tore Svanberg said Volterra was focused on the commercial side of the market and Windows 8 was less likely to boost the stock.
Svanberg said expectations for Volterra earnings were high after positive comments from chipmaker Intel Corp. about its Romley server platform. But, the analyst said, weakening economic conditions and softness in non-Intel-based servers led Volterra to post disappointing earnings.
SHARE ACTION: The shares were down $3.62, or 14.4 percent, at $21.60 in Tuesday afternoon trading. That's near the bottom of their 52-week range of $18.09, reached last October, and $34.87, set in late March. Until Tuesday, the shares were down 1.5 percent for the year.