Earnings reports

Extreme Warns of Loss

SANTA CLARA, Calif. -- Citing weak economic conditions, Extreme Networks, Inc. (Nasdaq: EXTR) today announced that it expects revenue for the third quarter ended March 31, 2001 will be approximately $110 to $115 million. Based on these revenues, the Company expects to report a pro forma loss of approximately $0.06 to $0.08 per share for the quarter. This estimated loss excludes estimated charges for the third quarter and fourth quarter. The Company also announced that it would reduce its expenses, including workforce reductions, resulting in an approximate 10 percent reduction in the Company's overall cost structure. The Company expects to take restructuring charges of approximately $2 million related to excess facilities in the third quarter and charges of approximately $4 million for employee-related termination costs in the fourth quarter. In addition, the Company expects to take third quarter charges of approximately $41 million, consisting of asset impairments, write downs for minority investments, and excess inventory.

"Despite these challenging economic times, it's essential to stay focused and continue to make long-term strategic investments that strengthens Extreme Networks in the marketplace," said Gordon Stitt, president and CEO of Extreme Networks. "With the acquisitions of Optranet and WebStacks, made during the third quarter, we have significantly improved our position in both the enterprise and service provider sectors."

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