Semiconductor exchange traded funds (ETFs) were on Tuesday's market menu after NetLogic Microsystems (NasdaqGS: NETL) said it swung to a first-quarter profit.
"Unfortunately, NetLogic continues to deal with an inventory correction, with the June quarter marking 9 months of overhang," said Williams Financial Group in an earnings outlook.
"The expectation had been that inventories would be depleted in the March quarter but the company is seeing further correction necessary in the second quarter," according to the report. "The good news is NetLogic does expect revenue to grow sequentially in the June quarter."
The semiconductor and Internet networks company said first-quarter revenue rose 14.4% from the year-ago period.
Sterne Agee analyst Vijay Rakesh noted NetLogic's per-share earnings beat consensus, while inventories were down 9% quarter over quarter to the lowest level in a year. The analyst said revenue fell from the fourth quarter on continued inventory rebalancing at key customer Cisco (NasdaqGS: CSCO).
NetLogic is a component in SPDR S&P Semiconductor (NYSEArca: XSD) and iShares PHLX SOX Semiconductor Sector Index Fund (NasdaqGM: SOXX).
SPDR S&P Semiconductor