Communications chipmaker Conexant Systems Inc. (CNXT) Tuesday said quarterly earnings could be less than half its prior outlook, citing weak demand for wireless local area network products, and sending its shares down more than 40 percent.

New Jersey-based Conexant cut its outlook for earnings for the fiscal third-quarter, ended July 2, to 2 cents per share from its previous view of 3 cents to 5 cents a share.

"A number of Taiwan-based chip suppliers emerged with extremely low-priced solutions, displacing incumbent suppliers in certain high-volume applications," Armando Geday, Conexant's chief executive officer, said in a statement.

The company said it expects revenue of between $265 million to $270 million, compared with expectations in April in the range of $308 million to $323 million.

Competition pushed prices lower in an already pressured market as Conexant's customers lost market share, the company said.

In the third quarter, operating expenses came in lower than anticipated and gross margin should remain in the expected range of 42 percent, Geday added.

Conexant shares fell $1.68 to $2.40 on Nasdaq (search), after earlier hitting a more than one-year low of $2.19. It was the most actively traded stock on Nasdaq.