Paradyne Networks missed analysts' reduced estimates in its third quarter Wednesday, losing $611,000, or 2 cents a share, on sales of $62.4 million.
First Call Corp. consensus pegged it for a loss of 1 cent a share in the quarter.
In Paradyne's defense, the company warned in late September that it would either break even or lose up to 2 cents a share in the quarter.
Ahead of the earnings report, Paradyne (Nasdaq: PDYN) shares moved up 13 cents to $5.19.
In the year-ago quarter, Paradyne posted a profit of $2.8 million, or 9 cents a share, on sales of $57.7 million.
"We are disappointed with our third quarter results as they did not meet our expectations," said CEO Andy May in a prepared release. "As we previously reported, a few of our network service provider customers have changed their plans for rolling out DSL services and we no longer believe these customers will purchase significant amounts of our equipment."
On Sept. 28, Paradyne said some of its biggest customers cut back their equipment orders. It predicted sales would fall between $59 million to $63 million in the quarter.
The company said Korean networking firm Dreamline Inc., which accounted for 29 percent of sales during the first six months of the year, was responsible for the majority of the shortfall.
Paradyne shares hit a 52-week high of $53 in March before slumping to a low of $5 earlier this month.
Four of the six analysts following the stock rate it a "buy."