By Rex Crum, CBS.MarketWatch.com
SAN FRANCISCO (CBS.MW) - Memory chipmaker SimpleTech said Wednesday it would take a $3.5 million charge and cut its second-quarter revenue outlook due to the closing of a product division and negative market conditions.
SimpleTech said it expects to post second-quarter revenue between $53 million and $56 million, down from a previous forecast of $66 million. The Santa Ana, Calif.-based company said it lowered its forecast because of a reduction in flash memory sales and a decrease in prices of its core DRAM chip products.
The company said the charge was due to the closing of its Xiran product division. SimpleTech expects the Xiran closing will cut its operating expenses by $2 million per quarter.
Separately, SimpleTech said its board of directors authorized a $15 million stock repurchase plan, which is to take place over the next 18 months.
SimpleTech shares slumped by 75 cents to $3.60 in after-hours trading.