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Cypress Semiconductor cuts 3Q guidance

SAN JOSE, Calif. (AP) -- Cypress Semiconductor cut its revenue and profit guidance for the third quarter Tuesday, citing weaker-than-expected revenue in of Asia.

Shares plunged more than 10 percent at the open of trading.

Some customers are delaying the purchase of new handsets until the first quarter, while others are ordering less because of overstocked inventories, said Chief Financial Officer Brad Buss.

The revenue shortfall "is mostly specific to certain end customer challenges in the mobile handset markets and is not a broad-based customer weakness," Buss said.

Cypress now expects to lose 9 to 11 cents per share for the third quarter, which ends this month. It predicted an adjusted profit of 10 to 12 cents per share.

Revenue is projected to come in at $184 million to $187 million. In July, the company said it expected revenue to exceed the $193.5 million it had booked in the second quarter.

Fourth-quarter revenue will fall an additional 9 percent to 11 percent from its new, lower third-quarter guidance, which Cypress said was in line with its usual fourth-quarter profit decline.

Profit margins will decline temporarily because Cypress won't be using its factories as much, although expenses will shrink as labor costs decline.

Shares of Cypress Semiconductor Corp. dropped $1.18 to $10.26.