Xircom Inc. (Nasdaq: XIRC), which makes products that enable computers to connect to networks, blamed a coming earnings shortfall on Y2K issues Friday.
Shares fell 6 15/16 to 34 1/16, or 17 percent, in early trading Friday, continuing their fall from a peak of 75 15/16 reached in late December.
The company said second-quarter earnings would come in between 30 and 35 cents per share, far below analysts' consensus estimate of 56 cents, according to First Call's statistics. Xircom said revenue would range between $108 million and $110 million.
The news shouldn't be a big surprise to investors. Analysts predicted the company would fall short in its second quarter back in February. Some analysts also said Xircom didn't deserve the punishment it got from investors.
"The first half of the (second) quarter got off to a slow start in our access card business due to an extended Y2K freeze on notebook roll-outs at several of our large enterprise customers,'' said CEO, president and Chairman Dirk Gates in a prepared release.
The company named a few positives, including improved sales of access cards from the company's distribution and OEM partners in the last several weeks and strong demand for its new product lines, including its Rex wearable information accessory, where it expects 40 percent sequential unit growth this quarter.
Official second-quarter results will be reported April 17.
Xircom's competitors include 3Com (Nasdaq: COMS), IBM (NYSE: IBM) and Fujitsu.
Reuters contributed to this report.