Network Peripherals said Monday that it will miss analysts' sales and earnings estimates by a huge margin this quarter as result of shipment delays caused by what the company called "software issues."
Network Peripherals (Nasdaq: NPIX) shares closed off 5/8 to 16 1/2 ahead of the warning.
The maker of high-speed switches said it now expects second-quarter sales to come in below $1 million this quarter, well short of analysts' estimates of $5.6 million.
First Call Corp. consensus expected Network Peripherals to lose 17 cents a share in the quarter.
"Early in the quarter, new advanced software features were incorporated into the company's then current software release," the company said in a prepared release. "This new software release over time proved to be unstable in certain environments and this affected the "sales out" of the company's OEM and, to a lesser degree, channel partners in the form of sharply reduced re-stocking orders.
It went on to say the software instability issue caused it to delay shipment to a large Asian customer for its acceptance testing.
Network Peripherals said it has identified and addressed these software instability issues and believes that it has resolved them.
"While we are clearly very disappointed with the financial expectations for the current quarter, we believe these are short term timing issues," said CEO Bill Rosenberger. "We believe these technical issues have been resolved although too late in the quarter to mitigate the revenue shortfall. Shipments have resumed, and acceptance testing, according to our Asian customer, is proceeding well and is expected to be complete in July."
Last quarter, Network Peripherals lost $3.8 million, or 28 cents a share, on sales of $3.3 million.
Its shares surged to a 52-week high of 79 in February after falling to a low of 15 5/16 in September.
All five analysts following the stock rate it either a "buy" or "strong buy."
It's now expecting a profit of between 12 cents to 14 cents a share, woefully short of the consensus estimate of 29 cents a share.
The communications equipment maker said sales will lumber in at $74 million to $82 million mainly because sales to AT&T (NYSE: T) have dried up.
Its shares closed up 1 13/16 to 40 13/16 ahead of the profit warning but then collapsed to 27 9/16 in after-hours trading.