Sycamore Forecasts a Third-Quarter Disaster

Sycamore (SCMR Quote - Cramer on SCMR - Stock Picks) warned investors Thursday that third-quarter results will be nothing short of disastrous, with a steep loss of sales contracts reversing an expected profit and revenue falling short of estimates by at least 60%.

Syacmore now expects to post a loss of 16 to 19 cents for the quarter ending April 28, on revenue of $50 million to $60 million. Analysts polled by Thomson Financial/First Call expected the Chelmsford, Mass., company to earn 5 cents a share on a pro forma basis on revenue of $152 million. In an admirable show of understatement, Sycamore attributed the shortfall to "lower-than-expected customer orders."

The maker of optical networking gear also said it would cut 140 jobs, combine two units and take write-offs of $140 million to $150 million in a move to slash expenses. The company said it would offer financial guidance beyond the third quarter when it reports earnings in May.

After rallying $1.41 during regular trading Thursday to $9.06, shares of Sycamore sold off in after-hours trading, returning to $8 on Island.