Foundry Faces Tough Times

As earnings season cranks up once again, the first indications of the quarter’s winners and losers are starting to emerge. At this stage, Foundry Networks Inc. (Nasdaq: FDRY) has already sprung a downside suprise.

Last night Foundry announced its preliminary first-quarter results, cutting its revenue forecast from $100-$110 million to $84 million. The company attributed this shortfall to two key factors: a slowdown in U.S. Federal Government orders and worse-than-expected sales to North American enterprise customers (see Foundry Q1 to Fall Short).

The first sign of these problems emerged earlier this year when, despite announcing record annual revenues, Foundry admitted that Federal spending was a sore spot in its fourth-quarter figures. The firm blamed this shortfall on the shifting of budgets to the Iraq war effort (see War Fogs Foundry's Numbers).

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— James Rogers, Site Editor, Next-Gen Data Center Forum

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