C-COR Slashes 3Q Projections3/23/2005 8:47 AM Eastern
C-COR Inc. stock hit a new 52-week low Wednesday after the cable-equipment vendor said an accounting change would force it to cut its third-quarter revenue expectations by about one-third.
C-COR shares dipped as low as $6.05 apiece Wednesday (down 98 cents each), well below the company’s previous 52-week low of $6.59. The stock rebounded later in the day, closing at $6.41 each, down 62 cents per share.
C-COR announced late Tuesday that it expected revenue in its fiscal third quarter, which ends March 25, to be $47 million-$49 million instead of the $70 million-$75 million it previously predicted.
The vendor said the shortfall is the result of two things: Purchase-accounting adjustments for its acquisition of nCUBE Corp. in January were greater than expected, and new customer orders are being received too late in the quarter to be recorded as revenue for that quarter.
C-COR expects to release its third-quarter results April 21.
This is the second time this year that C-COR has had to revise guidance. Last year, the State College, Pa.-based equipment maker went on an acquisitions tear, buying five companies for a total of $151 million.
In early January, C-COR warned that revenue would be $58 million-$59 million in its fiscal second quarter, instead of the $62 million-$66 million previously anticipated. Second-quarter revenue, released Jan. 20, was $58.5 million.
In a conference call with analysts Wednesday morning, C-COR chairman and CEO David Woodle said that initially, the company had expected a large portion of nCUBE’s $20 million backlog to be transferable in the third quarter, but because of the accounting rules, less than $7 million was recognized.
As far as the late orders, Woodle said C-COR has recently completed several master agreements with MSOs for different products that took longer than expected to be completed.
The vendor said it expects to experience some impact from the accounting changes in the fourth quarter, but to a lesser degree.
C-COR said it expects bookings to be about $80 million in the third quarter with backlog at about $73 million.
“We are hitting some tough spots in the integration for this quarter, but I feel good that we are positioned where we need to go in the future beyond that,” Woodle said.