ADC Telecom hammered on profit warning
ADC Telecommunications shares hit a new 52-week low after the company says its fiscal first-quarter earnings will miss estimates.
Shares of the telecommunications equipment maker fell $5.75, or 27 percent, to $15.56 by market close. ADC's shares have slumped in recent months along with other telecom stocks, falling from a 52-week high of $49 in July to a new 52-week low of $14.94 earlier Friday.
The Minneapolis-based company said it now expects pro forma earnings between 5 cents and 7 cents a share for the quarter ending Jan. 31. First Call's consensus analysts' estimate calls for earnings of 12 cents a share.
Revenues for the period are now pegged at around $800 million, compared with sales of $594 million in the year-ago period. Analysts were expecting revenues of $881 million, according to First Call.
The company said the lower numbers are due to the challenging economic environment and lower-than-expected domestic spending by communications service providers.
As a result, ADC previously announced measures to control expense growth in 2001. Earlier this month, the company said it was laying off 400 workers, representing slightly less than 2 percent of its work force.
The company said it will take undetermined, nonrecurring charges in the first and second quarters because of staff reductions and changes in product lines.
ADC also slashed its outlook for fiscal 2001, with revenue and pro forma earnings per share expected to increase by 15 percent. Prior guidance was for growth of between 25 percent and 30 percent for the year.
Last quarter, ADC beat analysts' estimates by a penny, earning $138 million, or 18 cents a share, on sales of $1.03 billion.
The company will release its actual financial results for the first quarter Feb. 21.