Proxim Plummets on Q4 Cuts
Proxim Corp.'s (Nasdaq: PROX) share price has taken a nosedive on the back of a $10 million slash in revenue forecasts for the fourth fiscal quarter of 2004.
The infrastructure vendor expects a pro forma loss of 29 to 34 cents per share in the fourth quarter on revenue ranging from $22 million to $24 million. Its previous outlook was for a pro forma loss of 9 to 14 cents per share on revenue of between $32 million and $35 million.
The cut caused the company’s stock to plummet 17.3 percent at press time, down to $4.09 per share.
So why the massive shortfall?
In a statement this morning, Proxim blames all manner of problems for the loss. The company starts by lamenting general industry conditions, citing “lower than expected wireless carrier revenue due to continued carrier consolidation and delayed deployments.”
It then points the finger of blame at rival Cisco Systems Inc. (Nasdaq: CSCO), stating that Cisco’s “unforeseen Wi-Fi pricing action... and resulting pricing pressure” has contributed to Proxim’s “lower than expected Wi-Fi product revenue.”
Proxim also declares that its wireless LAN product line has suffered from “delayed transitions from the Orinoco AP-2000 platform to the Orinoco AP-4000 platform within key OEM accounts.” (See Proxim Upgrades Orinoco.)
Finally, its new Tsunami broadband wireless kit appears to be suffering problems. "Unexpected Tsunami MP.11 Model 5054R product availability issues... have prevented product shipments on several transactions." (See Proxim's WiMax Path and Proxim Intros Tsunami Solutions.)
— Justin Springham, Senior Editor, Europe, Unstrung