UPDATE 2-Sigma Designs Q4 earns miss market view; shares fall

(Recasts, adds details, analyst's comment)

By Purwa Naveen Raman

BANGALORE, March 12 (Reuters) - Chipmaker Sigma Designs Inc (SIGM.O: Quote, Profile, Research) reported fourth-quarter earnings that slightly missed Wall Street estimates, due to a drop in its gross margins, and forecast a sequential decline in first-quarter revenue.

Shares of the company, which makes chips for Internet Protocol television set-top box market and Blu-ray players, fell 10 percent to $22.80 in after-market trade, after closing down more than 5 percent at $25.26 Wednesday on the Nasdaq.

Sigma said in a conference call that it expects first-quarter revenue of $60 million, citing one-time adjustment in demand from a major customer.

BWS Financial Inc analyst Hamed Khorsand said the company could be referring to Motorola Inc. (MOT.N: Quote, Profile, Research).

The customer may have been buying ahead of demand in third and fourth quarter and ended up having a lot more set-top boxes than the actual demand, Khorsand said by phone.

Analysts expected revenue of $76.3 million, according to Reuters Estimates.

Sigma, which competes with Broadcom Corp (BRCM.O: Quote, Profile, Research) and STMicroelectronics (STM.PA: Quote, Profile, Research), however, said it expects the sequential revenue growth to resume in the second quarter.