OmniVision sinks on fears of losing business at Apple

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(Global Markets) - Shares of OmniVision Technologies Inc (OVTI.O) lost over a quarter of their value in pre-market trading, a day after the camera sensor maker forecast a weak second quarter, raising fears that it is losing business at top customer Apple Inc (AAPL.O).

At least three brokerages cut their price target on the company's stock following the glum outlook

"The below than seasonal guidance reflects market share loss. It's clear now that Apple is dual-sourcing its image sensors with Sony," Needham and Co analyst Rajvindra Gill wrote in a note to clients.

OmniVision supplies image sensors used in smartphone cameras. Its sensors are used in Apple's iPhone 4 and Motorola's (MMI.N) Droid series of handsets.

The company expects second-quarter adjusted earnings of 52-64 cents per share on revenue of $255-275 million, well below analysts' expectations of 81 cents per share in earnings on revenue of $305.7 million, according to Thomson Global Markets I/B/E/S.

Needham's Gill, who cut his target price on the company's stock by $15 to $30, said OmniVision has most likely lost half of its business at Apple but would still supply sensors for the iPhone 5 set to be unveiled next month.

The company's shares, which closed at $24.82 on Thursday, have lost almost a third of their value since rumors of Sony vying for an Apple contract first surfaced in April.They were down a further 27 percent at $18.25 before the bell on Friday.

(Reporting by Himank Sharma in Bangalore; Editing by Viraj Nair)