Warning Slams Ikanos
Manufacturing problems and weakness in the overall communications market drove Ikanos Communications (IKAN) to cut its sales outlook after the bell Wednesday.
The announcement sent the stock plunging. In premarket trading Thursday, Ikanos was sinking 29% to $7.80, putting it beneath its 52-week closing low of $9.
The Fremont, Calif., maker of broadband-network-equipment chips warned investors that revenue in the quarter ended Sept. 30 will likely range between $36 million and $37 million, instead of the $40 million to $43 million outlook it provided in July.
The company also delivered a revenue outlook for the fourth quarter underway that fell well below the Street's consensus, pegging sales between $24 million and $26 million.Analysts polled by Thomson Financial were expecting Ikanos to generate $43.3 million in fourth-quarter revenue. "Looking ahead to our fourth quarter, we believe that revenue will be affected due to the general weakness in the overall communications sector and some deployment delays," said CEO Rajesh Vashist in a press release. "Additionally, carriers in Japan are currently working through their existing equipment levels, thus impacting our fourth-quarter revenue. We believe this will largely be resolved by the end of the year," Vashist said.
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