Comverse Technology Inc. (Nasdaq: CMVT) is struggling to stabilize its core Service Provider Information Technology (SPIT) business as it seeks to restructure its ownership structure.

The company's Comverse Inc. (Nasdaq: CNSI) subsidiary, which is in the process of being spun out from its parent company and which has just appointed its own CEO, on Thursday reported revenues of US$137.8 million and an operating loss of $22.9 million in its fiscal first quarter, which ended on April 30. (See Comverse Gets a New CEO and Comverse Goes It Alone.)

In the same period a year earlier the business generated revenues of $163.2 million and an operating loss of $37.7 million. The lower operating loss was due to significantly reduced costs, down $41 million compared with a year ago to $160.6 million.

Within the Comverse subsidiary, revenues from the BSS product line were down 23 percent year-on-year to $57.7 million, while revenues from the VAS (value-added services) product line were down 17 percent to $65.9 million. (See this earnings release for more details.)

The company is blaming the timing of revenue recognition and the impact of the company's restructuring process on the weak numbers, but noted that it had achieved an upturn in BSS orders during the fiscal first quarter and had experienced "considerable interest" in its new VAS products (an IP messaging platform and its Service Enablement Middleware). (See Comverse Targets IP Messaging.)

The parent company, Comverse Technology (comprising Comverse, roaming services firm Starhome and enterprise security and analytics specialist Verint), reported revenues of $343.7 million and a loss per share after one-time costs (non-GAAP earnings) of 15 cents.

Financial analysts had been expecting revenues of nearly $380 million and non-GAAP earnings of 11 cents, so it was no surprise to see Comverse Technologies' share price slump by 7.4 percent on Thursday to close the day at $5.62.

The company also reported disappointing numbers in its fiscal fourth quarter that ended late January, so it has its work cut out to turn its fortunes around before it splits the company into separate listed entities in the second half of this year. (See Tough Going for Comverse .)

In a recent discussion, Comverse Technologies CEO Charles Burdick noted that Comverse would be focusing on helping service providers to monetize data services, deal with OTT (over-the-top) services and deploy truly converged billing systems that can handle pre- and postpaid accounts, real-time campaign management and CRM operations.

Comverse competes with the likes of Amdocs Ltd. (NYSE: DOX), CSG Systems International Inc. (Nasdaq: CSGS), Oracle Corp. (Nasdaq: ORCL) and Netcracker Technology Corp. , which recently acquired the BSS assets of Convergys. (See NEC to Buy Convergys Unit for $449M, Analysts Mull NetCracker's New Buy and NetCracker's Suite Spot.)

— Ray Le Maistre, International Managing Editor, Light Reading