Virata plunges on lowered guidance
Shares of the company, which last month inked a server and software deal with Cisco (Nasdaq: CSCO), fell 5.08 to 8.98 in pre-session trading on the Island ECN network.
In a release, the company said that much of the re-scheduling is part of a supplementary contract with Westell Technologies Inc.(Nasdaq: WSTL), under which Virata will cancel 40 percent of Westell's previously contracted purchases and re-schedule the remaining shipments. Similar arrangements were made with a limited number of Virata's other customers in Asia and the U.S.
As a result the company now sees revenue in the third quarter at $37 million, down from its original $46.7 million forecast. For its fourth quarter, Virata expects revenues will be at least $37 million, down from previous estimates of $58.4 million.
Earnings for the company's third quarter were cut as well, with profits now expected to be 4 cents a share. First Call analysts had forecast earnings of 14 cents a share.