Aspect Communications shares plunged 23 15/16, or 55 percent, to 19 15/16 Tuesday after it warned that its second-quarter sales and earnings will miss analysts' estimates.
Aspect (Nasdaq: ASPT) said late Monday that it expects to report second-quarter earnings ranging between 1 cent and 3 cents a share, excluding goodwill writedowns but including gains from stock sales.
First Call Corp. consensus was expecting a profit of 8 cents a share in the quarter.
On Tuesday, Wit SoundView cut the stock from a "strong buy" recommendation to a "buy" while Dain Rauscher Wessels slashed it from a "strong buy aggressive" rating to "neutral."
Revenue in the second quarter ranged between $137 million and $139 million, the company said. Services revenue ranged between $64 million and $65 million, CEO Beatriz V. Infante said, during a conference call with analysts Monday.
Aspect sees third quarter revenue ranging between $139 million and $143 million, with 60 to 65 percent growth year-over-year in license revenue. The company sees fourth quarter sales between $153 million and $163 million in the fourth quarter, with license revenue increasing 55 to 60 percent from the year-earlier period.
Services should growth 1 to 3 percent sequentially
Company executives blamed second quarter shortfall on lower-than-anticipated business in the central region of North America, a delay in multi-million contract awards from the federal government and unexpectedly steep declines in sales of hardware products. Market demand remains "healthy", the company said.
Aspect's second quarter results "are not acceptable and we are doing our best to remedy them in the future," Infante said during the conference call.
The company has replaced the head of sales for the "severely" underperforming North American region, Infante said. Aspect is one of a few vendors vying for the federal government contracts, and hopes to win them in the second half of the year.
Because of the regional sales issues, Aspect will reach its overall growth target one to quarters later than originally planned, Infante said.
Larry Barrett contributed to this report.