ADC Forecasts, Shares Slide
As a result, ADC is readying more layoffs and spending cuts. Details aren't finalized yet, and ADC intends to lump its restructuring costs into a second-quarter charge. (See ADC Cuts Guidance .)
For its first quarter, which ended Jan. 30, ADC now expects sales to be between $240 million and $255 million, compared with its earlier predcition of $255 million to $290 million.
Its losses per share will be between 17 cents and 23 cents, which goes beyond the original (and awfully wide, come to think of it) forecast of 5 cents to 17 cents.
Pro forma losses per share will probably be between 6 cents and 12 cents, analyst Simon Leopold of Morgan Keegan & Company Inc. writes in a report this morning. Analysts on average were expecting losses of 2 cents per share, according to Thomson First Call .
ADC didn't go into the causes of all this, but you can take a pretty good guess. Service providers are getting stingier with their budgets; and, as Leopold points out, ADC might have been particularly hurt when AT&T Inc. (NYSE: T) decided to push out its U-verse goals by a year. (See AT&T Cuts Capex by up to $3B.)
Leopold doesn't consider ADC's predicament to be a sign of everything going south for telecom equipment. In addition to the AT&T factor, ADC has to reckon with the fact that much of its sales come from older equipment, he writes.
ADC shares were down $1.24 (25%) to $3.83 by mid-afternoon.
— Craig Matsumoto, West Coast Editor, Light Reading