X

Visual Networks lowers projections into 2001

2 min read

Visual Networks Inc. (Nasdaq: VNWK) became the latest technology issue to tank after warning its second quarter will be worse than expected. The company said pro forma revenue or earnings will be lower for the rest of the year and 2001.

Shares in the e-business software maker were down 14 11/16 to 11 9/16 Thursday.

The company anticipates pro forma revenue for the quarter to be about $32.2 million and pro forma earnings to be around a penny a share.

First Call was expecting a profit of 6 cents a share.

"We attribute our quarterly shortfall to management's focus on the Avesta transaction and integration and the resulting diversion of our attention from day-to-day operations," Chairman and CEO Scott Stouffer said in a statement.

Visual Networks competes with ADC Telecommunications (Nasdaq: ADCT), Cisco Systems (Nasdaq: CSCO) and Hewlett-Packard (NYSE: HWP) according to Hoover's Online.

The company said the doubling of its company and reorganization of the sales force has proven more challenging than with other acquisitions. Distractions caused by integration difficulties resulted in a short-term decrease in revenue from the company's Visual UpTime and IP Insight products.

The company added there is hope: it is pursuing a number of significant software opportunities until the last day of the quarter, which, if realized, would have result in its meeting analysts' expectations. Given the magnitude of the integration activities still to be done, though, management said analysts should revise their expectations.

Visual Network's earnings projections get worse for upcoming quarters -- diverging more and more from analysts' expectations into 2001. For the third quarter, the company anticipates $30 million in revenue and a loss of 3 cents a share, compared to First Call's prediction of 8 cents a share. For fourth quarter of 2000, the company anticipates revenue of $32.5 million and break-even earnings, compared to First Call's consensus of 11 cents a share. For 2001, the company anticipates revenue of $165 million and earnings of 37 cents a share, compared to First Call's expectation of $1.02 a share.

The company will announce its second quarter results on July 13.