C-Cor.net Slashes Workforce, Lowers Guidance

C-Cor.net (CCBL Quote) plans to cut roughly 37% of its workforce in an effort to counter the effects of continued weakness in the economy and further delays in spending by its customers.

The company also expects third- and fourth-quarter earnings to come in below Wall Street's expectations because of higher-than-expected overhead and projected weak demand for its products.

Shares of C-Cor fell $1.31, or 16.5%, to $6.69 in recent Nasdaq trading.

C-Cor will cut 700 of its 1,900 employees, mostly from the company's manufacturing plant in Tipton, Pa., and service support operations in Atlanta. C-Cor, which provides technology and services for broadband communications companies, will take a charge of $10 million to $12 million in the third quarter.

For the third quarter, which ends today, C-Cor expects to lose 14 cents to 16 cents a share, excluding restructuring charges, down substantially from its year-ago earnings of 13 cents a share. Four analysts surveyed by Thomson Financial/First Call expect the company to lose a penny a share. C-Cor forecast third-quarter revenue of $39 million to $40 million, down from $62.9 million in the year-ago period.

For the fourth quarter, C-Cor again projected a loss of 14 cents to 16 cents a share, while analysts expect the company to earn 4 cents. In the same quarter one year ago, C-Cor, which is based in State College, Pa., earned 16 cents a share.

C-Cor believes it will post fourth-quarter revenue of $35 million to $39 million, down from $79.5 million a year ago.