ADC Telecommunications dropped more than 19 percent Friday after the company said its fiscal first-quarter earnings would miss estimates due to a sector-wide spending slowdown.
Shares of the telecommunications equipment maker (Nasdaq: ADCT) fell 4.25 to 17.06 in pre-session trading on the Island ECN electronic trading network. ADC Telecom's shares have slumped in recent months along with other telecom stocks, falling from a 52-week high of $49 in July to $15.13 earlier this month.
The Minneapolis-based company said it now expects pro forma earnings between 5 cents and 7 cents a share for the quarter ending Jan. 31. First Call's consensus analysts' estimate calls for earnings of 12 cents a share.
Revenues for the period are now pegged at around $800 million, compared with sales of $594 million in the year-ago period. Analysts were expecting revenues of $881 million, according to First Call.
The company said the lower numbers are due to the current challenging economic environment and lower-than-expected domestic spending by communications service providers.
As a result, the company previously announced measures to control expense growth in 2001. Earlier this month, ADC said it was laying off 400 workers, representing slighly less than 2 percent of its workforce.
As a result, the company said it will take undetermined, non-recurring charges in the first and second quarters as a result of staff reductions and changes in product lines.
The company also slashed its outlook for fiscal 2001, with revenue and pro forma earnings per share expected to increase by 15 percent. Prior guidance was for growth of between 25 percent and 30 percent for the year.
Last quarter, ADC Telecom beat analysts' estimates by a penny, earning $138 million, or 18 cents a share, on sales of $1.03 billion.
ADC telecom will release its actual financial results for the first quarter on Feb. 21.
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