PictureTel Corp. (Nasdaq: PCTL) warned Thursday that second quarter loss will be between 60 and 62 cents a share, below First Call's estimated loss of a 46 cents a share. Revenue will be on target between $80 million and $86 million, according to a company statement.
Shares were up 3/16 to 7 3/8.
The company blamed the loss on lower overall margins and higher operating expenses for the second quarter ended July 4, 1999. The revenue, in-line with estimates, included the revenue generated by sales of the SwiftSite II compact videoconferencing system, which the company had deferred from the first quarter. The company had previously announced it would include this figure in its second quarter results.
The stock has had a rocky road since sinking on an SEC probe into the company's restatement of results in 1997. PictureTel announced June 17 it had settled the consolidated securities class-action lawsuit against them with a payment of approximately $12 million, three-quarters of which was covered by PictureTel's insurance. Shares also dipped after the company reported losses of 68 cents a share in line with analysts' estimates last April.
The company said it implemented cost reduction programs during the second quarter, the benefit of which it hopes to realize in the future. Net loss also included previously reported one-time charges of 18 to 20 cents a share to account for restructuring actions and settlement of the lawsuit.
Two out of four analysts covering the stock rated it a "buy," and the other two rank it a "sell," according to Zach's Investment Research.
PictureTel, based in Andover, Mass., isn't the first maker of videoconferencing equipment to experience losses. PictureTel plans to report its complete second-quarter financial results on July 22, 1999. FVC.com Inc. (Nasdaq: FVCX) is also expected to report losses at 17 cents a share for the quarter ending in June.