Analysts stepped in to restate the bad news: Don't expect an improvement anytime soon.
Wednesday's announcement reflects a continuing deterioration at the company, which supplies DSL (digital subscriber line) access infrastructure to competitive local exchange carriers, which in turn deliver DSL services to business customers. It warned in February that first-quarter sales would drop far below expectations.
Shares in Copper Mountain closed off 78 cents, or more than 17 percent, to $3.69--below it's 52-week low of $4. Earlier shares touched $3.56.
The company said late Wednesday that it would slash 25 percent of its 450-employee staff and take a one-time charge of between $5 million and $7 million in the quarter. It also did a management shuffle that included founder Joseph Marke, who resigned as chairman but will remain a member of the board of directors, and CFO John Creelman, who resigned to pursue other opportunities. President and CEO Rick Gilbert will assume the role of chairman. Michael Staiger, previously vice president of business development, will take Creelman's place as CFO.
Analysts had nothing positive to say about the restructuring, which will primarily be made outside of the engineering ranks--job cuts will target the sales customer support, operations, and general and administrative functions.
"We remain convinced that a turnaround is not likely in the near term," said WR Hambrecht analyst Tim Savageaux. He bemoaned the struggles among the company's customer base and Copper Mountain's lack of success in entering the more established carrier market.
The news was no surprise, added Savageaux, who maintained a "neutral" rating on the stock.
Morgan Stanley analyst Michael Lynch also reiterated a "neutral" rating and said he does "not expect near-term catalysts." But, Lynch added, "2002 could be different when CMTN releases a new...service concentrator."
Copper Mountain isn't alone in its woes. Other DSL-related companies such as Efficient Networks, Turnstone Systemsand Paradyne have issued profit warnings, announced layoffs or missed estimates in their latest quarters due to weakness among competitive local exchange carriers.