Atheros shares fall after analyst downgrade

LOS ANGELES

Shares in wireless network chip maker Atheros Communications Inc. fell 4 percent Monday as an analyst downgraded the stock, saying the company has graduated from being a dark horse to meeting higher expectations.

The company "rode the netbook wave" but pricing pressures on chips that work a new standard for wireless networks, 802.11n, and the likely loss of share in the competitive netbook segment will hurt growth, said Barclays Capital analyst Romit Shah.

"We believe after the first quarter the challenge for Atheros will shift from beating and raising consensus estimates to meeting the bar," he said.

Shah's target price for the shares remained unchanged at $40.

He expects earnings per share of $2.20 in fiscal 2010 and $2.40 in fiscal 2011.

Atheros shares fell $1.61, or 4 percent, to $35.61 in midday trading Monday.