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Performance Technologies crumbles on profit warning

Performance Technologies (Nasdaq: PTIX) was cut in half Monday after it announced revenue for the second-quarter would be below estimates due to lower-than-expected orders and a delayed shipment.

Shares fell 14 1/2 to 13 3/4, well below their 52-week high of 45 1/4.

The company said its revision was based on the delayed shipment of a significant order, and lower than expected orders from two major customers. The current order backlog is not sufficient to meet revenue expectations for the second quarter.

Second quarter operating results are now expected to be about the same as the prior year's; $10 million in revenue and 11 cents a share in diluted earnings. First Call's consensus of 4 analysts had projected earnings of 19 cents a share. Official second quarter financial results will be released July 26.

Given the weakness in the order backlog the company has seen this quarter, and its inability to predict the timing of when customers will begin production shipments for its new design wins, expectations for the year have also been lowered.

Revenue and earnings for 2000 are now expected to reflect about 10 percent year-over-year growth. In 1999, the company brought in earnings of 58 cents a share.

Performance Technologies said the current order shortfall is a timing related issue and does not impact long-term prospects.

During the first four months of 2000, the company received notification for more than ten new design wins for its Signaling System 7 (SS7) and communication access, and carrier-class switching products.

In some cases, it may take several months before these customers initiate production shipments. Once this deployment begins, however, these new design wins are expected to generate revenue in excess of $20 million. The company also said revenue from its Signaling System 7 and communications products are expected to grow by more than 60 percent this year, from about $25 million in 1999.

The company's competitors include SBE Inc (Nasdaq: SBEI), Osicom Technologies (Nasdaq: FIBR) and Digi Technologies (Nasdaq: DGII) according to Hoover's Online.