Axesstel Reports Q3

Revenue for Q3 is preliminarily estimated at approximately $15.4M

November 2, 2007

1 Min Read

SAN DIEGO -- Axesstel, Inc. (AMEX:AFT - News) today pre-announced results for the third quarter ended September 30, 2007, reviewed its outlook for 2007 and provided initial guidance for 2008.Financial Results

Revenue for the third quarter is preliminarily estimated at approximately $15.4 million, compared to $28.0 million in the second quarter of 2007. Revenue for third quarter was affected by a number of factors. The fixed wireless phone business in Asia continued to be marked by intense price competition with low profit margin. The company experienced shipping delays for some products due to software customization for several new customers. Finally, longer payment cycles resulting from a heavier concentration of revenue from South America impacted working capital. Axesstel has taken steps to finance those receivables, but slow payments to the company's principal contract manufacturer resulted in shipment delays at the end of the third quarter and beginning of the fourth quarter.

Revenue continued to shift to the company's data modem business, which accounted for approximately $9.9 million, or 64 percent of total revenue. As of October 31, 2007, the company had a backlog of approximately $22.0 million, of which an estimated $15.0 million is data modems.

“Our data business continues to grow aggressively at good margins; we expect it to contribute between $40.0 million and $45.0 million in 2007, up from $26.0 million last year and $5.0 million in 2005,” said Marv Tseu, chief executive officer of Axesstel. “We intend to continue our excellent performance in data modem growth, and in 2008, we expect data modem revenue to grow by 50 percent or better.”

Axesstel Inc. (OTC: AXES)

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