DragonWave Drops After Sales Exec Resigns
NEW YORK (TheStreet) -- Shares of DragonWave (DRWI) fell sharply on Wednesday after a longtime sales executive abruptly announced plans to resign from the company.
Brian McCormack is leaving the post of vice president of worldwide sales with DragonWave, a Canada-based provider of packet microwave radio systems for mobile and access networks. McCormack, who joined the company in 2003, is staying to help with transition for the next 45 days.
The stock was recently down 12.7% at $5.52 on volume of 980,000, more than three times the issue's trailing three-month daily average of roughly 330,000.
"We are grateful to Brian for his contribution and service at DragonWave," said Peter Allen, the company's president and CEO, in a statement. "We appreciate what he has done for the company and wish him well in his future endeavors."
DragonWave said regional sales executives will now report directly to Allen. The company is sure to face plenty of questions about McCormack's departure later Wednesday as it's slated to report its fiscal first-quarter results after the closing bell. Year-to-date, the stock was down about 25% before Wednesday's sell-off with the most recent pullback coming after the company lowered its outlook for the first quarter on June 3 to revenue of $11 million from a prior projection of $15 million. For the past 52 weeks, the shares are still up almost 18% with the high for the year of $9.20 dating back to Dec. 14. DragonWave cited the deferral of a "significant" equipment by a customer in North America, and the impact of regulatory delays on a customer in the Middle East for the lower revenue view. Wall Street was pretty bearish on DragonWave ahead of McCormack's resignation with 10 of the 12 analysts covering the stock at either hold (6), underperform (1) or sell (3). The average analysts' estimate is for DragonWave to report a loss of 19 cents a share for its fiscal first quarter ended in May. --Written by Michael Baron in New York.>To contact the writer of this article, click here: Michael Baron. >To submit a news tip, send an email to: tips@thestreet.com
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