| Silicon Image Inc. shares dropped in Friday trading after the chip maker posted a twofold increase in fourth-quarter income but forecast first-quarter sales below Wall Street estimates. The company, which makes high-definition multimedia interface (HDMI) transmitters used in digital media devices, said Thursday it expects $68 million to $72 million in first-quarter sales, below expectations for $73.2 million in sales from analysts polled by Thomson Financial. Jefferies & Co. analyst Adam Benjamin cut his rating on the stock to "Underperform" from "Hold" and recommended investors sell shares due to the industry's slow adoption of next-generation HDMI used in HDTVs, personal computers and DVD players. The analyst also cited Silicon Image's aggressive revenue guidance, deteriorating prices and margins, eroding computer business, and a challenging TV strategy. Needham & Co. analyst N. Quinn Bolton cut his rating on the stock to "Hold" from "Buy" based on uncertainty surrounding the company's new product strategy. "We encourage investors move to the sidelines until valuation becomes more compelling or the DTV market shows signs of adopting Silicon Image's product strategy," Bolton wrote in a note to investors. Shares of Silicon Image, which have traded between $8.20 and $14.68 over the last 52 weeks, fell $2.85, or 23.4 percent, to $9.32 in afternoon trading on the Nasdaq. |
