The company announced that it expects a loss of 10 cents per share before charges related to acquisitions for its just-completed third quarter. The projected loss flies in the face of analysts' consensus estimates that pegged Cabletron's earnings at 11 cents per share, according to First Call.
Cabletron said revenue for the quarter would fall between $330 million and $340 million. The company posted sales of $331.8 million for the same period the previous year.
Cabletron stock closed the day down 3.5, or 25 percent, to 10.75. Shares have traded as high as 25.5 and as low as 6.625 in the past 52 weeks.
Company executives said the most recent quarter was more challenging than expected. "We compete in one of the world's most competitive industries, which is characterized by significant pricing pressures, shifts in technology, and longer market acceptance time," said Craig Benson, the company's chairman and chief executive, in a prepared statement.
Company executives pointed to three primary reasons for the shortfall, according to analysts briefed by Cabletron:
The company, trying to reclaim its status as a fast-growing networking form, has faltered of late. Though Cabletron beat estimates for its last quarter, the firm did not show an appreciation in revenue, a far cry from the company's hard-charging boom years.
Nevertheless, the company's executives have remained hopeful in the face of the first series of fiscal pitfalls in the company's history, pointing to the technology gained via a series of acquisitions as evidence that Cabletron is ready for a comeback.
Announcement of the quarterly loss ends a tumultuous year for Cabletron, highlighted by a bizarre shake-up in March that left Benson, a company founder, holding onto the top spot. Gone as chief executive after less than a year was Don Reed, a veteran telecommunications executive who was brought in to help the company refocus its strategy for high-growth markets.