Profit warning stings Metro One shares

Shares of Metro One Telecommunications Inc. (Nasdaq: MTON) plunged 2 3/16, or 14 percent, to 13 1/16 Tuesday, after the company said it would miss analysts' estimates by a dime a share in its second quarter.

The directory assistance provider for wireless telecommunications companies said it now expects sales of between $17 million to $17.5 million and earnings of 1 cent a share in the quarter.

First Call consensus expected Metro One to earn 11 cents a share in the quarter.

The stock closed up 1, or 7 percent, to 15 1/4 ahead of the profit warning.

Last quarter, it made $682,000, or 6 cents a share, on sales of $14.1 million.

"The expected earnings, which are below consensus analysts' estimates, come as the result of our electing to take on an increased amount of staffing and infrastructure expenditures in preparation for additional scheduled call volume from a number of markets under long-term contract with a major customer group," said CEO Timothy Timmins in a prepared release.

"Had this additional call volume arrived as expected, we estimate that earnings for the quarter would have been in line with analysts' estimates," he said.

In a separate announcement, Metro One said it signed a multi-year contract to provide its EDA services to Nextel Communications Inc. (Nasdaq: NXTL). Under the terms of the contract, Metro One will provide its EDA services to Nextel's nationwide network of wireless subscribers.

Metro One shares hit a 52-week high of 19 7/16 in February after falling to a low of 4 3/4 in September.

All five analysts following the stock maintain either a "buy" or "strong buy" recommendation.>