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Sycamore's loss wider than expected

The network-equipment maker falls short of analysts' reduced estimates in the third quarter as sales plunge 64 percent from the prior quarter.

Sycamore Networks wrapped up a miserable third quarter with even more bad news Tuesday, missing analysts' reduced estimates by a penny a share.

The maker of optical network equipment checked in with a loss of $46.2 million, or 19 cents a share, on sales of $54.2 million.

First Call consensus expected Sycamore to lose 18 cents a share on sales of $61 million.

Sycamore shares closed down 7 cents to $9.32 ahead of the earnings report before slipping to $8.76 in after-hours trading.

Earlier this quarter, Sycamore shocked Wall Street when it warned that it would fall woefully short of estimates in the quarter and lay off 140 employees, citing slowing orders from major telecommunications customers.

Analysts originally pegged Sycamore for a profit of 5 cents a share on sales of $151.8 million.

The $54.2 million in sales represents an 8 percent decline from the year-ago quarter when it pocketed $6.8 million, or 2 cents a share, on sales of $59.2 million. Sales plunged 64 percent from last quarter, when the company earned $8.1 million, or 6 cents a share, on sales of $149.2 million.

"We believe that the challenges we face are primarily a result of capital spending and macroeconomic issues," Sycamore Chief Executive Officer Dan Smith said in a statement, adding that the company's outlook for the next few quarters remains "restricted."

Sycamore, whose products move voice and data traffic over wavelengths of light, relies on a small number of customers, namely Williams Communications and 360networks, for the bulk of its sales.

The stock rallied up to a 52-week high of $172.50 in August before crashing to a low of $6.63 in April.

Thirteen of the 20 analysts following the stock maintain a "hold" recommendation.