Natural MicroSystems says 4Q sales, earnings will disappoint

Network-equipment maker Natural MicroSystems joined 3Com Monday in warning that its fourth-quarter sales and earnings will miss analysts' estimates. It also lowered its guidance for fiscal 2001.

Natural MicroSystems (Nasdaq: NMSS) shares closed off $1.94 to $18.75 ahead of the warning but fell to $12 a share in after-hours trading.

Company officials said a slowdown in some sectors of the telecom industry and the deferment of other orders into fiscal 2001 caused the shortfall.

Sales are expected to be flat with the third quarter, around $40 million.

It expects to post earnings of between 6 cents to 8 cents a share in the quarter, well below the First Call Corp. consensus estimate of 12 cents a share.

Last quarter, it posted a profit of 15 cents a share on sales of $40.5 million.

CEO Bob Schechter said the company is also lowering its sales estimates for fiscal 2001 from 60 percent to 70 percent growth to a more realistic gain of 40 percent to 50 percent.

"We are experiencing the impact of a slowdown in some sectors of the telecommunications industry," Schechter said in a prepared release. "Many of our customers are aggressively increasing efficiency in their supply chains and reducing inventory levels."

3Com (Nasdaq: COMS) issued a similar warning after the bell, predicting flat sales a wider-than-expected loss in its second fiscal quarter.

Natural MicroSystems shares peaked at $78.63 in September before plunging to a low of $14.88 in November.

All eight analysts following the stock rate it either a "buy" or "strong buy."

Analysts were expecting a profit of 80 cents a share in fiscal 2001, an estimate that surely will lowered in the coming weeks.