iPod component maker SigmaTel last night warned of lower-than-expected quarterly earnings.
Company shares fell as a result of the news, which the company attributed to manufacturing problems and weak demand for its low-end products.
However, it's not as bleak as it sounds. SigmaTel now expects earnings of 20 cents per share on $74.4 million. The company had originally promised earnings between 30-37 cents per share in $73-83 million revenue.
"A contributing factor to the missed guidance was equipment issues at SigmaTel's test and assembly facilities," the company explained.
"These unfortunate events were compounded by the heavily back-end loaded demand for SigmaTel's product during the latter half of September," the company said.
The mix of products sold during the quarter was impacted by this loss of production with: "A significant amount of higher-end products unable to ship, shifting the sales mix and driving down gross margins. There were a total of 1.3 million lost units that forced the rescheduling of the related orders to October 2005," SigmaTel explained in a release.
The company is already known to makes chips for Apple's flash-based iPod shuffle. It is not clear if it manufactures components for the iPod nano, which was released in September, and experienced "quality control" issues in some units.