The semiconductor equipment company now believes that second-quarter sales will fall by as much as 20%. Previously, the company said that sales would be flat to down 10%. The company blamed the shortfall on a general slowdown in the industry, "which results in longer acceptances and delays in shipments," it said.
Analysts polled by Thomson First Call had been expecting sales of $22.1 million, down 6% sequentially and up 36% from last year's $16.2 million in sales. Shares were trading down $1.62 to $11.03.
Paradyne Networks (PDYN) rose 52% after the company agreed to be acquired by Zhone Technologies (ZHNE - Get Report) for about $180 million in stock. The deal values Paradyne at $3.92 a share, representing a premium of 107% based on Thursday's closing prices.Once the deal is completed, Zhone shareholders will own about 63% of the combined company. The transaction is expected to close during the fall of 2005. In addition to announcing the stock swap, Paradyne also said that it expects to post second-quarter sales and earnings that will exceed previous guidance. Analysts are expecting a loss of a penny a share on sales of $27.3 million. Shares of Paradyne were recently trading up 98 cents to $2.87; Zhone Technologies was trading down 71 cents, or 20%, to $2.86. Shares of Transmeta (TMTA) rose 38% after the company said it expects to post positive cash flow during the second quarter. In May, the company said that it expected to reduce negative cash flow to less than $5 million a quarter by the end of the second quarter. "We have surpassed our first goal of substantially reducing our cash burn, and in fact I am now able to comfortably say that we will report positive operating cash flow for the 2005 second quarter," the company said.