Recently, Lattice Semiconductor Corporation ( LSCC - Snapshot Report ) reduced its revenue expectations for the fourth quarter of 2012. Following the news, the company’s shares fell 1.86% to $4.23 after the markets closed on Wednesday.

The chipmaker now expects sales to be down 6%–8% sequentially versus its previous guidance of plus or minus 2% sequentially.

Management expects revenue to decline on account of weakness in the communications market combined with continued softness in the worldwide distribution channel. The communications market represented approximately 47% of the company’s third quarter revenue and decreased 7.8% sequentially.

However, the company maintained its gross margin guidance of 53% (+/-2%) and total operating expenses guidance of approximately $43 million, which includes approximately $5.5 million of restructuring charges.

Recently, the company has taken steps to restructure its sales and marketing functions, which will reduce operational spending by approximately $12 million annually. The company expects to incur total restructuring charges of approximately 6 million, of which $5.5 million will be recognized in the fourth quarter.

It is imperative that Lattice continues to undertake various initiatives and develop new products, keeping in mind the interest of the organization in both the long and short run. We believe the restructuring action and new products in both consumer and non-consumer segments will bring in stability and steady earnings growth in the near future.

Lattice Semiconductor designs, develops and markets high performance programmable logic devices and related development system software. The company’s third quarter revenue was down 13.2% from the year-ago period to $70.9 million due to lower programmable logic devices (PLD) revenue. However, revenue for field programmable gate arrays (FPGA) surged 24.8% year over year to $26.1 million.

The company is likely to report its third-quarter results on January 24.

Currently, Lattice Instruments has a Zacks #3 Rank (Hold). We note that its rival, Xilinx Inc. ( XLNX - Analyst Report ) also carries a Zacks #3 Rank (Hold) while Altera Corp. ( ALTR - Analyst Report ) carries a Zacks #4 Rank (Sell).