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Copper Mountain warns of lower fourth-quarter revenue

The company joins the club of downtrodden DSL stocks, announcing that fourth-quarter revenue will miss expectations.

Copper Mountain Networks joined the club of downtrodden DSL stocks Friday and announced that fourth-quarter revenue will miss expectations.

Shares in the digital subscriber line provider fell 47 cents, or about 10 percent, to $4.28 by market close. The stock had already taken a beating Wednesday when all DSL stocks were hammered after equipment suppliers Efficient Networks and Turnstone Systems issued profit warnings.

Revenue for Copper Mountain's fourth quarter, ended Dec. 31, is now expected to be in the range of $46 million to $49 million. The company said net revenue was dented by weakness in the competitive local exchange carrier customer base.

It also said results were lower because of a decision not to recognize about $8 million of shipped equipment as part of its revenue, because it's not sure the customer that placed the order will be able to pay. The maximum balance sheet exposure associated with this customer, including the fourth-quarter shipments, is about $6 million.

The Palo Alto, Calif.-based company added that in spite of current market conditions, it will continue to expand its international businesses and target the incumbent telecommunications service provider DSL markets.

After Wednesday's warnings, Robertson Stephens analyst Paul Johnson overhauled his ratings on all the companies his firm follows in the DSL market, including Copper Mountain. He said the main problem this year is the difficulty that independent carriers had in gaining market share from the incumbent local exchange carriers and traditional carriers.

Copper Mountain will release actual results for the fourth quarter Feb. 1.