Novatel Wireless shares tumble on weak forecast; company had posted 4Q profitBy AP
Thursday, February 25, 2010
Novatel Wireless shares tumble on weak forecast
SAN DIEGO — Novatel Wireless Inc. posted a profit in the fourth quarter on better sales of its modems and wireless networking gear. But the stock fell on weaker-than-expected guidance.
Novatel Wireless shares fell 76 cents, or 10.3 percent, to $6.59 in extended trading, after the results were reported.
The company said Thursday that its net income was $952,000, or 3 cents per share, in last three months of 2009, versus a loss of $3 billion, or 10 cents per share, in the same period a year ago.
Excluding items, net income was 7 cents per share. Analysts polled by Thomson Reuters were forecasting 7 cents per share. Analysts generally exclude one-time charges and charges from employee stock compensation from their estimates, but it wasn’t clear if their estimates on Novatel Wireless excluded such charges.
Revenue rose 36 percent to $88.6 million, which was short of the $91.0 million analysts were expecting.
Peter Leparulo, CEO of Novatel Wireless, cited “steady” demand for USB modems and wireless networking products.
The company, based in San Diego, said it expects first-quarter revenue of $70 million, which was below the $84 million analysts were expecting. The company blamed lower average selling prices for its products and the fact sales are slower at the start of the year than during the holidays.
The company also predicted a loss of 8 cents per share, excluding items. Analysts were expecting a profit of 5 cents per share, but it was unclear if that figure excluded items.
During the regular trading session, before the report, Novatel Wireless shares had gained 23 cents, or 3.2 percent, to close at $7.35.
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