Tumbleweed Communications Trampled After it Announces Earnings Shortfall
Tumbleweed Communications (TMWD) warned before the bell of lower-than-expected fourth-quarter results, citing what analysts have of late been griping about: slower information technology spending.
The Redwood City, Calif., email and messaging provider also announced it was cutting about 20% of its staff and expects a one-time restructuring charge, of an undisclosed amount, in the first quarter of 2001.
And its shares tumbled to a new low on the news. They were down lately $6.75, or 67.5%, to $3.25 in preopen Island trading. They closed a $10 in Tuesday regular-session trading.
Tumbleweed said this morning it expects a fourth-quarter net loss, excluding expenses related to stock compensation, amortization and acquisition-related charges, of between $17 million and $18.1 million, compared with $7.6 million in last year's fourth quarter. The company did not provide any earnings-per-share figures, but nine analysts polled by First Call/Thomson Financial were expecting a fourth-quarter loss of 29 cents a share, compared with a loss of 20 cents a share last year.The company also said it sees fourth-quarter revenue of $7.5 million to $8 million, up from $4.54 million in the same period last year, but lower than previously expected. Three analysts polled have estimated fourth-quarter revenue of $15.5 million. For calendar year 2000, the company said it expects to report a net loss, excluding charges, of between $39.9 million and $41 million, compared with $20.6 million in calendar 1999. It also said it sees total revenue of $36.6 million to $37.1 million, compared to total revenue in 1999 of $15.3 million from continuing product lines. Tumbleweed expects to announce its actual results and offer more detail of its restructuring plans on Jan. 25, 2001.
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