A fiscal shortfall for Cabletron
The network equipment maker says it will not meet fiscal third-quarter earnings expectations.
In a vague preannouncement of earnings released today, the company said revenues for the quarter ending December 22 would fall in the $330 million to $340 million range, a drop from the $361 million reported for the same period during the previous year.
The company said earnings per share would come in around 8 to 12 cents per share.
A consensus estimate compiled by First Call pegged the company's fiscal 1998 third-quarter earnings at 39 cents per share. Cabletron reported earnings per share of 44 cents for the same period during the previous year.
According to the release, the company "does not yet have all the details for the quarter to fully explain these expected results."
Cabletron did say that it was affected by an order shortfall during the quarter, due to "weakness" in some domestic markets and delays in decisions by accounts in the federal government. The company also said forecasting its fiscal results was becoming more difficult due to longer sales cycles.
In addition to the preannouncement of the fiscal shortfall, the company said it would realign in order to focus its strategy, resulting in a $25 million to $30 million charge that will be tacked on to fourth-quarter earnings.
Cabletron last week announced the purchase of Digital Equipment's network infrastructure business for $430 million in cash, stock, and product credits. (See related story.)
A long string of record financial growth came to a screeching halt in the first quarter when Cabletron first had to preannounce a sales shortfall and then divulged final earnings that had remained flat year after year. The company's founder, president, and CEO, Robert Levine, stepped down in August; he was replaced by Don Reed, a telecommunications industry veteran.
Shares of Cabletron plummeted nearly 30 percent in morning trading today, to as low as 16-3/8 a share, down from its close of 23-3/16 yesterday.