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Comverse down on warning
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July 11, 2001: 12:56 p.m. ET
Telecom software provider sees lower sales, earnings through fiscal year '03
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NEW YORK (CNNfn) - Shares of telecom software company Comverse Technology Inc. plunged Wednesday after it lowered its profit forecasts for the current quarter, the remainder of this year, and the coming fiscal year as well.
The news, which the company released before the markets opened, sent shares of Comverse (CMVT: down $12.60 to $26.42, Research, Estimates) more than 33 percent lower. They were the most actively traded on Nasdaq.
The Woodbury, N.Y.-based company said it expects to report a profit of 28 cents per share for the quarter ended July 31, excluding special items, and revenue of $345 million.
Analysts surveyed by earnings tracker First Call had expected earnings of 43 cents per share, up from the 36 cents it reported in the year-earlier period, and sales of $369.3 million, up from $292.1 million a year ago.
The company also said it expects third-quarter earnings of 20 cents per share on revenue of $330 million, missing the First Call forecasts of 45 cents per share in earnings and $387 million in revenue.
For the fourth quarter, Comverse said it expects earnings to come in at 23 cents per share, below the First Call estimate of 48 cents, with revenue of $340 million rather than the forecast $410.2 million.
Looking further out, the company said it expects earnings for the fiscal year ending in Jan. 2003 to be $1.37 per share and revenue of $1.53 billion, sharply below the First Call forecast of $2.12 a share earnings and revenue of $1.88 billion.
The company – whose software phone companies use to offer call answering, voice mail, and other services – blamed the weaker results on a slowdown in spending by telecom companies as well as the strong value of the dollar compared with the euro.
"The capital spending recession and macro-economic slowdown appears to have spread throughout the developed world, and conditions have continued to deteriorate," said Kobi Alexander, CEO of Comverse. "Increasingly, customers have postponed discretionary purchases, such as the replacement of competitors' systems, and system and software upgrades." 
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Comverse
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