The stuggling Pittsburgh, Pennsylvania-based networking firm announced today that preliminary results for its fiscal 1998 first quarter will come in below expectations. The company expects to post earnings of 5 to 6 cents per share for the just-completed period on revenues of between $95 and $97 million.
The company, which leads the sector in equipment for ATM (asynchronous transfer mode) networks, also came in below expectations for its fourth quarter, sparking a double-digit drop in the company's stock price and reinvigorating rumors that Fore is an acquisition target of companies such as Hewlett-Packard and Cabletron Systems.
In May, Fore chairman and CEO Eric Cooper denied merger rumors.
Fore was expected to announce earnings of 8 cents per share for its fiscal first quarter, according to a consensus analyst estimate compiled by First Call. The company will officially announce results for the period on July 22.
The company's revenues will still increase year-over-year, from $83.4 million for the same period last year. Fore's stock was up about a half a point in heavy early-morning trading.
Fore may be a victim of an overall malaise in the networking industry as customers hold off on major purchases until they can get a better handle on new technologies such as Gigabit Ethernet. That tentativeness on the part of users is combined with a maturation within the sector. Big players like Ascend Communications and Cascade Communications are merging to survive and the massive profits that catapulted players like Cabletron Systems to the forefront are beginning to ebb.
"Fore's first-quarter results were affected by several factors, including slower overall growth in the networking industry, continued weakness in international markets, longer sales cycles for large enterprise networks, and market confusion over competing networking technologies," Cooper said in a prepared statement. "While these factors are affecting our growth in the short term, we remain optimistic about the future."