Wireless Facilities Learns a Hard Lesson
In the second quarter, for example, WFI missed revenue estimates because of contract delays and took a $1 million charge related to unexpected fees. The company has missed its own guidance figures for three quarters running.
WFI cited out-of-control costs on key contracts near the Gulf Coast and in Latin America. Labor and material costs are ballooning in the hurricane-battered southeastern U.S., where WFI has 60% of its enterprise business; and in Latin America, where managers apparently let project costs spiral out of control.
DeMarco said the hurricanes battering the Gulf Coast had driven up the cost of raw materials and subcontracting labor. What's more, the need to rebuild is so much stronger in other areas that the work on these contracts is likely to be delayed. CFO Deanna Lund said the heaviest hurricane-related costs would take one to two percentage points out of fourth-quarter gross margin.
The problems in WFI's Latin America division, which appeared to be
centered on work for Spanish carrier Telefonica
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